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Steven D. Creelman v. Carpenters Pension & Annuity Fund of Philadelphia & Vicinity

May 14, 2013


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


The plaintiff, Steven Creelman, initiated this lawsuit after the defendant, Carpenters Pension and Annuity Fund of Philadelphia and Vicinity ("Carpenters Fund" or "Fund"), denied him a disability pension. Creelman alleges that, in rendering its decision, the Carpenters Fund violated several aspects of the Employee Retirement Income Security Act of 1974 ("ERISA"), and he brings suit under ERISA §§ 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), and 502(a)(3), 29 U.S.C. § 1132(a)(3). Specifically, Creelman argues that the Fund unreasonably denied him a disability pension, procedurally erred in the course of its decisionmaking process, and breached its fiduciary duties. He contends that the Fund's unreasoned decision necessitates remand so that it may reconsider its benefits determination, and that its other violations estop it from pursuing certain eligibility arguments before this Court and on remand.

Creelman has moved for summary judgment on all claims. The Fund has cross-moved for summary judgment on Creelman's wrongful denial of benefits claim, which, if granted, moots Creelman's claims based on procedural error and breach of fiduciary duty. The Court held oral argument on the parties' cross-motions, and will grant the Fund's motion for summary judgment on Creelman's wrongful denial claim and deny the motion for summary judgment filed by Creelman.

I. Summary Judgment Record

The Court's review of the Fund's benefits determination is limited to the administrative record on which that decision was based. Howley v. Mellon Fin. Corp., 625 F.3d 788, 793 (3d Cir. 2010); see also Fleisher v. Standard Ins. Co., 679 F.3d 116, 121 (3d Cir. 2012). Creelman's breach of fiduciary duty claim, however, implicates some evidence extrinsic to the administrative record. The Court, therefore, draws certain facts relating to that claim from admissible evidence in the summary judgment, but not administrative, record. The facts described herein are undisputed unless otherwise noted.

A. The Parties

The Carpenters Fund is a trust fund established under 29 U.S.C. § 186(c)(5) and constitutes an "employee benefit plan" within the meaning of ERISA, 29 U.S.C. § 1002(3). The Fund operates as part of the Carpenters Pension and Annuity Plan of Philadelphia and Vicinity ("Plan"). The Plan is governed by an amended and restated plan document, the current version of which has been in effect since May 1, 2010 ("Plan Document").*fn1 The Plan Document defines who qualifies as an "Active Participant" in the Plan. An individual becomes an Active Participant by working a certain number of creditable hours per Plan Year, defined as the twelve-month period beginning May 1 and ending April 30. An Active Participant loses that status by, among other things, falling below a certain working-hour threshold in a Plan Year.

R. at D10303-04, D10306, D10310.*fn2

Steven Creelman was born on December 8, 1960. As of October 2007, Creelman was employed by a company named AP Construction Inc. to work in dock construction and was an Active Participant in the Carpenters Fund. R. at D00122, D00145

B. Creelman's Injury

restated version of the Plan Document is the operative version

On October 29, 2007, while at his place of work, Creelman tripped and fell onto his knees, fracturing his left patella. R. at D00002-03. After suffering that injury, Creelman remained out of work and collected workers' compensation for almost a full year, returning to his job in mid-October 2008. Creelman stopped working in December 2008, and, with the exception of another return to work for a period of time between May and July 2009, has been out of work and on workers' compensation ever since. R. at D00146-53.

Between at least 2007 and 2009, Creelman received ongoing treatment from Dr. John Esterhai, M.D., and underwent several procedures related to his knee injury and other ailments. According to Dr. Esterhai, after Creelman's initial knee surgery, he began altering his gait as a means of favoring his left knee. As a result, Creelman developed pain in his right knee and heel, shoulders, hips, and lower back. By the summer of 2008, Dr. Esterhai determined that Creelman had bulging discs in his lower back and a small tear of the medial meniscus in his right knee.

R. at D00001-29. In March 2009, Dr. Esterhai wrote a report, stating that he thought it was unreasonable, given the condition of both of Creelman's knees and his spine, to expect Creelman to return to heavy labor. Dr. Esterhai stated that Creelman had "permission to return to sedentary work even now were such work available." In Dr. Esterhai's estimation, however, based on Creelman's age, work history, and education, Creelman did not have the skills to perform "in that environment." R. at D00030-31.

C. Creelman's Consideration of a Disability Pension At all times relevant to this action, the Carpenters

Fund offered disability pensions to Active Participants in the Plan, subject to requirements established in § 2.07 of the Plan Document. Section 2.07 provides, in relevant part, that an "Active Participant" shall become a "Disabled Participant," entitled to a disability pension, if he suffers a disability due to disease or bodily injury about which the Board [of Administration for the Fund ("Board")] makes a determination based on an examination of such Active Participant carried out by a doctor of medicine named by the Board and such other evidence as the Board may deem necessary, appropriate or desirable that such Active Participant is and presumably will continue to be for the remainder of his or her lifetime wholly prevented from engaging in any occupation or performing any work for wage or profit on account of such disability.

The section also states that a disability pension applicant must be an Active Participant in the Plan on the date of his application. R. at D10312-13, § 2.07(a)(1)(B), (a)(4).

In May 2010, the Fund's manager, Joseph Obuchowicz, sent Creelman a letter advising him of how he might obtain a Carpenters' Disability Pension. The letter specifically stated that Creelman's disability had to be severe enough to prevent him from doing any work for wage or profit for the remainder of his life and that Creelman was obligated to make an application while receiving the Fund's weekly disability benefit or workers' compensation supplement. The letter further suggested that Creelman simultaneously apply for a Social Security Disability Pension from the government. Obuchowicz attached to his letter a copy of § 2.07, which outlined the full eligibility requirements for a disability pension.*fn3 R. at D00034-35.

After receiving that letter, Creelman made an appointment to meet with Obuchowicz in early June 2010, with the intention of applying for a Carpenters' Disability Pension. At the meeting, Obuchowicz informed Creelman that it would be prudent to wait to apply for a disability pension until November of that year. According to Obuchowicz, Creelman would receive family medical benefits from the Plan's separate health and welfare fund until the end of October, but, if he applied for a disability pension, he would forfeit his eligibility for those benefits. Based on Obuchowicz's representations, Creelman did not apply for a Carpenters' Disability Pension at that time.

DX 1 (7/26/12 Creelman Dep.) at 29-31; PX 11 (10/9/12 Creelman Aff.) ¶ 5.

By the time of the June 2010 meeting, Obuchowicz was aware that, due to Creelman's lack of working hours, his status as an Active Participant would lapse on May 1, 2011. Obuchowicz was also aware that Creelman would need to apply for a Carpenters' Disability Pension by April 30, 2011, and that he was obligated to inform Creelman of this fact. DX 2 (7/26/12 Obuchowicz Dep.) at 32-33. At their meeting, Obuchowicz did not advise Creelman that he would lose his eligibility for a disability pension if he failed to file an application while still an Active Participant under the Plan Document or that his Active Participant status would lapse after April 30, 2011.*fn4

Following the meeting, neither Obuchowicz nor any other representative of the Carpenters Fund informed Creelman of the date by which he needed to submit a disability pension application. PX 11 ¶ 6.

D. Creelman's Application for Social Security Benefits In late 2010 or early 2011, Creelman submitted an application for Social Security disability insurance ("SSDI") benefits to the Social Security Administration ("SSA"). In connection with his application, Creelman was examined by Dr. Patrick Murphy, D.O., who submitted a report to the SSA in February 2011. Dr. Murphy began his report by noting that Creelman had sustained a left patellar fracture in 2007. He then went on to describe the various forms of treatment and diagnoses provided by Dr. Esterhai in the interim. In the course of his own medical examination, Dr. Murphy found that Creelman had, among other things, chronic pain in his left knee, mild degenerative joint disease in his right knee, bulging lumbar discs and back pain, bilateral hip strain, right heel plantar fasciitis, and a severed right big toe. In Dr. Murphy's estimation, Creelman could stand or walk approximately one to two hours a day and was able to sit for eight hours per day. Dr. Murphy did not opine on Creelman's capacity for work. R. at D00090-107.

To be eligible for SSDI benefits, an applicant must demonstrate disability "of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of ...

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