United States District Court, E.D. Pennsylvania
F. KELLY, Sr. J.
Norman Hansen (“Plaintiff”) filed suit in this
Court under the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001, et
seq., seeking disability pension benefits that he
believes were wrongfully denied by Defendant International
Painters and Allied Trades Industry Pension Plan (the
“Pension Plan” or “Pension Fund”) and
Defendant Board of Trustees of the International Painters and
Allied Trades Industry Pension Plan (the “Board”)
(collectively, “Defendants”). Plaintiff also
claims a document penalty under ERISA for failure to provide
plan documents, a breach of fiduciary duty, and equitable
before the Court are Plaintiff's and Defendants'
Cross-Motions for Summary Judgment, along with numerous
briefs in support and opposition to the respective motions.
For the reasons noted below, Plaintiff's Motion for
Summary Judgment is denied. However, as it relates to Count I
of the Complaint, this matter is remanded to the Board of
Trustees for consideration of whether a collective bargaining
agreement (“CBA”) between Plaintiff's
employer and the International Union of Painters and Allied
Trades (“IUPAT”) obligates the employer to
contribute to the Pension Plan for hours for workers'
compensation, unemployment compensation, and vacation time.
Defendants' Motion is granted as to Counts II, III, and
IV, but is denied as it pertains to Count I.
worked as a painter and was an active member of the IUPAT
from 1982 to 2012. (Compl. ¶ 9.) He was a vested
participant in the Pension Fund, which was established to
provide retirement benefits for employees covered under CBAs
between employers and the IUPAT. (Id. ¶ 2;
Def.'s Mem. Support Mot. Summ. J. at 1 (citing
Administrative Record (“AR”) 32, 157,
160).) The Pension Plan is a multiemployer
defined benefit plan for purposes of ERISA. (Compl. ¶
2.) The Board of Trustees, which is composed of an equal
number of IUPAT and employer representatives, administers the
Plan and is the “named fiduciary” under ERISA.
(Id. ¶ 3; see also AR 479.)
January 12, 2012, Plaintiff fell off of a ladder and injured
his right knee while working for Circle Wallcoverings, Inc.
(Compl. ¶ 10.) Plaintiff and Circle Wallcoverings, Inc.
executed a Workers' Compensation Compromise and Release
Agreement on August 8, 2013 for an agreed-upon amount in
settlement of all wage, medical, and specific loss benefits
related to the work injury. (Id. ¶ 12.)
Plaintiff also sought disability benefits from the Social
Security Administration. (See AR 20.) By letter
dated February 2, 2015, an administrative law judge
determined that Plaintiff was disabled under the meaning of
the Social Security Act beginning on September 23,
2013. (AR 27.) Plaintiff agreed to the September
23, 2013 determination for purposes of establishing
disability under the Social Security Act. (Compl. ¶ 16.)
February 14, 2015, Plaintiff applied for disability pension
benefits from the Pension Fund. (Id. ¶ 13.) On
March 10, 2015, the Pension Fund acknowledged receipt of his
application and requested a copy of the Social Security
Administration award to evaluate his claim. (Id.
¶ 14; see also AR 12.) The Pension Fund denied
Plaintiff's application for benefits on April 1, 2015
because he did not meet the requirement of Article 6, Section
6.12(4), which provides that a claimant must have “at
least 1, 000 Hours of Service in Covered Employment in the
two Calendar Years prior to the year in which he or she
became disabled.” (AR 33.)
timely appealed the denial by letter dated May 7, 2015.
(See Compl. ¶ 19; AR 102-03.) The letter also
included a request for copies of the IUPAT Pension Plan and
any summaries; Plaintiff's disability pension
application; annual statements of Plaintiff's pension
benefits for 2011 and 2012; all records used to calculate
Plaintiff's covered service for calendar years 2011 and
2012; and all other records related to Plaintiff's
disability retirement application. (See AR 102.) In
a letter dated May 27, 2015, Plaintiff reiterated his request
for the various documents. (Compl. ¶ 20; AR 107.) On
June 5, 2015, Plaintiff was provided with the 2015 Summary
Plan Description (“SPD”) of the IUPAT Pension
Plan, his disability pension application and supporting
documents, his pension statements from years 2011 and 2012,
and “all other documents in the Fund's possession
related to [his] benefit application and benefit
calculation.” (Compl. ¶ 21; AR 110.) The only
document not provided to Plaintiff was the actual IUPAT
Pension Plan itself. Plaintiff's appeal for review of the
denial of benefits was scheduled for the September 2015 Board
of Trustees meeting. (Compl. ¶ 23.)
August 27, 2015, Plaintiff submitted a memorandum to Corinne
M. Koch, the Pension Fund Administrator at the time, in
support of his appeal. (AR 43-55.) The memorandum advanced
several arguments for the basis of awarding benefits. First,
Plaintiff claimed he had accumulated 998 hours for work in
2011 and 2012 and that Defendants should have rounded-up to
1, 000 hours to ensure he would meet the 1, 000 hour
requirement. (AR 48-51.) He further argued that Defendants
“cherry-picked” information because they had used
his earned hours for 2011 and 2012, which equates to 894
hours, instead of his paid hours in 2011 and 2012, which
equates to 998 hours. (Id.) Second, Plaintiff
contended that Defendants refused to give him additional
benefit hours with respect to workers' compensation,
unemployment compensation due to layoff, vacation pay, all of
which were allegedly in violation of the service crediting
rules in 29 C.F.R. § 2530.200b-2. (AR 51-54.) On
September 24, 2015, the Pension Fund postponed
Plaintiff's appeal to the December 2015 meeting of the
Board of Trustees. (AR 150.) On October 2, 2015, the Pension
Fund provided to Plaintiff via email the IUPAT Pension Plan
in effect as of January 2010 and January 2015. (AR 153.)
Plaintiff's counsel requested hard copies of the
documents, and the Pension Fund provided them on October 27,
2015. (AR 155.)
Board of Trustees denied Plaintiff's appeal at the
December 2015 meeting. The Board mailed their decision to
Plaintiff by letter dated December 22, 2015, concluding that
he lacked the required work credit in years 2011 and 2012
because his benefit hours totaled 894. (AR 157-59.) The Board
of Trustees further stated that he was not entitled to
additional credit for workers' compensation, unemployment
compensation, vacation payments because pursuant to the
Pension Plan, “[t]here [was] no indication that
[Plaintiff's] employer was obligated to make
contributions to the Plan for [those] payment[s].” (AR
158.) As mentioned above, Section 6.12(a)(4) of Article 6
provides that a claimant must have “at least 1, 000
Hours of Service in Covered Employment in the two Calendar
Years prior to the year in which he or she became
disabled.” (AR 33.) As applicable to Plaintiff, the
Board of Trustees relied on subsection (a) of the definition
of “Covered Employment, ” which is “work or
leave time that is . . . Hours of Service for which an
Employer is obligated to make contributions to the Plan or
the Trust for credit to the Plan.” (AR 421.) In denying
credit for workers' compensation, unemployment
compensation, and vacation payments, the Board of Trustees
concluded there was no indication that Plaintiff's
employer was obligated to make contributions to the Pension
Plan for the additional hours he sought.
filed a four-count Complaint in this Court on September 20,
2016. Count I is a claim for benefits pursuant to 29 U.S.C.
§ 1132(a)(1)(B); Count II is a failure to provide plan
documents claim in violation of 29 U.S.C. § 1132(c)(1);
Count III is a breach of fiduciary duty claim under 29 U.S.C.
§ 1132(a)(2); and Count IV is a request for equitable
relief under 29 U.S.C. § 1132(a)(3). The parties filed
Cross-Motions for Summary Judgment on August 4, 2017.
Rule 56(a) Standard
Rule of Civil Procedure 56(a) states that summary judgment is
proper “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). The
Court asks “whether the evidence presents a sufficient
disagreement to require submission to the jury or whether . .
. one party must prevail as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
251-52 (1986). The moving party has the initial burden of
informing the court of the basis for the motion and
identifying those portions of the record that demonstrate the
absence of a genuine dispute of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). “A
fact is material if it could affect the outcome of the suit
after applying the substantive law. Further, a dispute over a
material fact must be ‘genuine, ' i.e., the
evidence must be such ‘that a reasonable jury could
return a verdict in favor of the non-moving
party.'” Compton v. Nat'l League of
Prof'l Baseball Clubs, 995 F.Supp. 554, 561 n.14
(E.D. Pa. 1998) (quoting Liberty Lobby, 477 U.S. at
judgment must be granted “against a party who fails to
make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that
party will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322. Once the moving party has
produced evidence in support of summary judgment, the
non-moving party must go beyond the allegations set forth in
its pleadings and counter with evidence that presents
“specific facts showing that there is a genuine issue
for trial.” See Big Apple BMW, Inc. v. BMW of N.
Am., Inc., 974 F.2d 1358, 1362-63 (3d Cir. 1992).
“More than a mere scintilla of evidence in its
favor” must be presented by the non-moving party in
order to overcome a summary judgment motion. Tziatzios v.
United States, 164 F.R.D. 410, 411-12 (E.D. Pa. 1996).
If the court determines that there are no genuine disputes of
material fact, then summary judgment will be granted.
Celotex, 477 U.S. at 322.
Denial of Benefits Under ERISA
administrator's denial of benefits is reviewed under a
de novo standard unless “the plan document
‘gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits or to
construe the terms of the plan.'” Dowling v.
Pension Plan For Salaried Emps. of Union Pac. Corp. &
Affiliates, --F.3d--, No. 16-1977, 2017 WL 4079460, at
*4 (3d Cir. Sept. 15, 2017) (quoting Conkright v.
Frommert, 559 U.S. 506, 512 (2010)). “If the plan
gives the administrator or fiduciary discretionary authority
to make eligibility determinations, [a court] review[s] its
decisions under an abuse-of-discretion (or arbitrary and
capricious) standard.” Viera v. Life Ins. Co. of N.
Am., 2 F.3d 407');">642 F.3d 407, 413 (3d Cir. 2011) (citing
Glenn, 554 U.S. at 111 (2008); Doroshow v.
Hartford Life & Accident Ins. Co., 574 F.3d 230, 233
(3d Cir. 2009)) (footnote omitted). The abuse-of-discretion
standard of review is used interchangeably with the arbitrary
and capricious standard of review in the ERISA context.
Id. at 413 n.4 (citing Howley v. Mellon Fin.
Corp., 625 F.3d 788, 793 n.6 (3d Cir. 2010)).
“Under the abuse-of-discretion standard, [a court] may
overturn an administrator's decision only if it is
‘without reason, unsupported by substantial evidence or
erroneous as a matter of law.'” Id.
(citing Miller, 632 F.3d at 845).
plan administrators are fiduciaries, and ‘if a benefit
plan gives discretion to an administrator or fiduciary who is
operating under a conflict of interest, that conflict must be
weighed as a facto[r] in determining whether' the
administrator's benefits decision should stand.”
Dowling, 2017 WL 4079460, at *8 (quoting
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 115 (1989)) (alteration in original). “The factors
may include procedural concerns about the administrator's
decision-making process and structural concerns about the
conflict of interest inherent in the way the ERISA-governed
plan was funded.” Patrick v. Devon Health
Servs., Inc., 828 F.Supp.2d 781, 793 n.14 (E.D. Pa.
2011). “‘[T]he procedural inquiry focuses on how
the administrator treated the particular
claimant.'” Miller, 632 F.3d at 845
(quoting Post v. Hartford Ins. Co., 501 F.3d 154,
162 (3d Cir. 2007)). “Specifically, in considering the
process that the administrator used in denying benefits, we
have considered numerous irregularities to determine whether,
in this claimant's case, the administrator has given the
court reason to doubt its fiduciary neutrality.”
Id. (quoting Post, 501 F.3d at 165)
(internal quotation marks omitted). However, the lawfulness
of the administrator's decision will rest on
case-specific factors that must be weighed together. See
id. (quoting Glenn, 554 U.S. at 117).
applying the arbitrary and capricious standard in ERISA
actions, a court is limited to reviewing the evidence
contained within the administrative record.” Clauss
v. Plan, 196 F.Supp.3d 463, 469 (M.D. Pa. 2016) (citing
Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 48
n.8 (3d Cir. 1993), abrogated on other grounds by
Glenn, 554 U.S. at 105); see also Mitchell v.
Eastman Kodak Co., 113 F.3d 433, 440 (3d Cir. 1997).
The Appropriate Standard of Review and Whether a Conflict of
de novo standard of review of the
administrator's denial of benefits is appropriate unless
the terms of the plan give the administrator discretionary
authority to determine benefits eligibility or to construe
the terms of the plan. See Dowling, 2017 WL 4079460,
at *4 (citation omitted). If the terms of the plan give the
administrator such discretion, then the arbitrary and
capricious standard is applicable. See Viera, 642
F.3d at 413.
is no question that the Board of Trustees is authorized with
the exclusive right of discretion to construe the terms of
the IUPAT Pension Plan and determine eligibility for
benefits. (See AR 391-92.) Accordingly, the
Court will review the Board of Trustees' denial of
Plaintiff's disability benefits under the arbitrary and
the parties dispute, however, is if there is a conflict of
interest that the Court should weigh as a factor when
determining whether the Board of Trustees' decision was
arbitrary and capricious. Plaintiff argues there is a
structural and procedural conflict of interest that must be
taken into account in this case. (See Pl.'s Mem.
Opp'n Defs.' Mot. Summ. J. at 5-9.) Defendants
respond by claiming that multiemployer benefit plans, by
their very nature, do not have conflicts of interest within
the meaning of Glenn. (See Defs.' Mem.
Support Mot. Summ. J. at 7-8.) Importantly, the mere presence
of a conflict does not change the standard of review from
arbitrary and capricious to de novo. See
Dowling, 2017 WL 4079460, at *8 (citing Glenn,
554 U.S. at 115).
Glenn, the Supreme Court agreed to answer the
questions as to whether a plan administrator that both
evaluates and pays claims is operating under a conflict of
interest, and if so, how such a conflict should be taken into
account when there is judicial review of a discretionary
benefit determination. See Glenn, 554 U.S. at 110.
In answering the first question, the Supreme Court held that
a conflict of interest exists when a plan administrator both
evaluates and pays claims for benefits. See id. at
112. In a more narrow statement, the Court then provided that
the “answer is clear where it is the employer that both
funds the plan and evaluates the claims.” Id.
at 112. As to the second question the Court agreed to answer,
if a conflict does indeed exist, it is simply “one
factor among many that a reviewing judge must take into
account.” Id. at 116; see also
Dowling, 2017 WL 4079460, at *8.
IUPAT Pension Plan is a multiemployer defined benefit plan
that is funded through contributions employers make pursuant
to CBAs between the IUPAT and the employers. (See AR
565.) The Board, which is composed of an equal number of
employer and union representatives, is the plan administrator
and named fiduciary of the Pension Plan under ERISA.
(See AR 329, 563, 565.) As mentioned above, they
have discretion to interpret the Pension Plan and make
benefit eligibility determinations. (See AR 391-92.)
appears to be a circuit split regarding whether multiemployer
pension plans such as this are conflicted within the meaning
of Glenn, and the Third Circuit has not yet spoken
on this issue. As articulated in Glenn, the first
step of the conflict analysis turns on whether the plan
administrator is both evaluating and paying claims. See
Glenn, 554 U.S. at 112. In Durakovic v. Bldg. Serv.
32 BJ Pension Fund, the United States Court of Appeals
for the Second Circuit (“Second Circuit”) held
that multiemployer benefit plans are conflicted because the
evaluation of claims is “entrusted (at least in part)
to representatives of the entities that ultimately pay the
claims allowed.” 609 F.3d 133, 139 (2d Cir. 2010).
While the employer representatives have fiduciary interests
that weigh in favor of the trusts' beneficiaries, they
also have interests that weigh to the contrary by virtue of
them representing the employer. See id. The fact
that the board was evenly balanced between union and employer
representatives had no influence on whether a conflict
existed, and the existence of union representation is
something that a court should consider at the second step of
the Glenn analysis, which is determining how heavily
to weigh the conflict. See id.
in Anderson v. Suburban Teamsters of N. Ill. Pension Fund
Bd. of Trustees, the United States Court of Appeals for
the Ninth Circuit (“Ninth Circuit”) held that
multiemployer benefit trust funds are not conflicted within
the meaning of Glenn. 588 F.3d 641, 648 (9th Cir.
2009); see also Tompkins v. Cent. Laborers' Pension
Fund, 712 F.3d 995, 1000-01 (7th Cir. 2013) (“We
held that a conflicts analysis was not necessary when the
plan at issue was a multi-employer welfare plan whose
trustees consisted of an equal number of union and employer
representatives, whose union representatives had ‘no
discernible incentive to rule against an applicant, ' and
whose trustees were unanimous in their ruling.”);
Klein v. Cent. States, Se. & Sw. Areas Health and
Welfare Plan, 346 F. App'x 1, 3 (6th Cir. 2009) (not
precedential). The Anderson court reasoned that the
trustees had no personal economic interest in the decision to
grant or deny benefits because participating employers, not
the trustees, fund the plan. See Id. Further, the
court found persuasive the fact that the trustees were
composed of an equal number of union and employer
representatives. See id.
the Second Circuit's decision in Durakovic more
persuasive. In Anderson, the Ninth Circuit relied on
Glenn for the proposition that “[a] conflict
of interest exists ‘where it is the employer that both
funds the plan and evaluates the claims.'”
Id. (quoting Glenn, 554 U.S. at 112). Of
course, that proposition is a correct statement of law. But
the Supreme Court's holding in Glenn went beyond
whether a conflict exists when it is the employer that
evaluates and pays the benefits claims. In Glenn,
the Court addressed the issue very succinctly: “whether
the fact that a plan administrator both evaluates claims for
benefits and pays benefits claims creates . . . a conflict of
interest. . . . In our view, it does.” Glenn,
554 U.S. at 112 (internal quotation marks omitted). The
initial determination of the existence of a conflict of
interest is quite simple. According to the first step of a
Glenn conflict analysis, a court must ask if it is
the plan administrator that both evaluates benefit
eligibility and pays the benefits. See Durakovic,
609 F.3d at 138. If so, a structural conflict of interest
exists that the court must weigh in determining whether the
administrator's decision to deny benefits was arbitrary
and capricious. See id. at 138-39. The cases
Defendants rely on fail to take into account the more
expansive nature of Glenn. Accordingly, because the
Board of Trustees both evaluates claims and the funds are
paid out of the Plan, there is a conflict of interest
pursuant to Glenn.
second step in the Glenn analysis focuses on how
heavily to weigh the conflict of interest identified. See
Glenn, 554 ...