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Hansen v. International Painters & Allied Trades Industry Pension Plan

United States District Court, E.D. Pennsylvania

August 1, 2018

NORMAN HANSEN, Plaintiff,
v.
INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION PLAN and BOARD OF TRUSTEES OF THE INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION PLAN, Defendants.

          MEMORANDUM

          ROBERT F. KELLY, Sr. J.

         This matter returns to the Court following our remand to Defendant Board of Trustees of the International Painters and Allied Trades Industry Pension Plan (“the Board”). After the parties previously filed Cross-Motions for Summary Judgment, the Court entered an October 11, 2017 Order finding the Board's decision to deny Plaintiff Norman Hansen (“Hansen”) disability pension benefits to be arbitrary and capricious and remanding the matter for a determination of whether certain hours to which Hansen claimed an entitlement should have been included in the calculus. After remand, the Board once again denied Hansen disability pension benefits.

         Presently before the Court are the Cross-Motions for Summary Judgment of Hansen and Defendant International Painters and Allied Trades Industry Pension Plan (the “Plan” or the “Pension Plan”) and the Board (collectively, “Defendants”), along with their respective responses and replies. For the reasons noted below, Hansen's Motion is denied, and Defendants' Motion is granted.

         I.BACKGROUND

         All of the facts prior to our remand are detailed in our October 11, 2017 Memorandum Opinion. See Hansen v. Int'l Painters & Allied Trades Indus. Pension Plan, No. 16-5028, 2017 WL 4539217, at *1-3 (E.D. Pa. Oct. 11, 2017). To summarize briefly, Hansen was an active member of the International Union of Painters and Allied Trades (“IUPAT”) and was a vested participant in the Pension Plan. Id. at *1. In January 2012, he was injured during work and subsequently entered into a “Workers' Compensation Compromise and Release Agreement” that settled all wage, medical, and specific loss benefits related to his work injury. Id. Hansen also sought disability benefits from the Social Security Administration, and he agreed to the date of September 3, 2013 for the purpose of establishing disability under the Social Security Act. Id.

         In February 2015, Hansen applied for disability pension benefits from the Pension Plan. Id. at *2. His application was denied in April 2015 on the basis that 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.” Id.

         Hansen timely appealed the decision and advanced several arguments in support of his position that he exceeded the 1, 000-hour threshold. Id. First, he claimed he accumulated 998 hours of work in 2011 and 2012 and that Defendants should have rounded-up to ensure he met the 1, 000-hour requirement. Id. Second, he argued that Defendants “cherry-picked” information because they used his earned hours in 2011 and 2012, which came to 894 hours, rather than his paid hours during those years, which came to 998 hours. Id. Finally, he claimed that Defendants refused to credit him with additional benefit hours for workers' compensation, unemployment compensation due to layoff, and vacation benefits. Id.

         The Board denied Hansen's appeal at a December 2015 meeting. For clarity, we reiterate that Hansen must have had 1, 000 Hours of Service in Covered Employment in the years 2011 and 2012 to be eligible for a disability pension. In denying Hansen benefits, the Board 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[.]” Id. The Board reasoned that Hansen's benefit hours totaled 894 and that he was not entitled to additional hours for workers' compensation, unemployment compensation, and vacation pay because “[t]here [was] no indication that [Plaintiff's] employer was obligated to make contributions to the Plan for [those] payment[s].” Id. (alterations in original).

         In September 2016, Hansen filed a four-count Complaint in this Court following the Board's denial of benefits. Count I claimed benefits pursuant to 29 U.S.C. § 1132(a)(1)(B); Count II alleged failure to provide plan documents in violation of § 1132(c)(1); Count III was a claim of breach of fiduciary duty under § 1132(a)(2); and Count IV requested equitable relief under § 1132(a)(3). Id. at *3. After the parties filed Cross-Motions for Summary Judgment, we entered an Order on October 11, 2017 that denied Hansen's Motion in its entirety and granted in part and denied in part Defendants' Motion. (See Doc. No. 17.) Accordingly, all of Hansen's claims were dismissed with prejudice except for his claim for benefits in Count I.

         We remanded Count I to the Board for a determination of whether the additional hours for workers' compensation, unemployment compensation, and vacation benefits should have been included in the computation for Hansen's disability pension. (See id.) In doing so, we found that the Board's reasoning was “troubling” in its statement that the additional hours Hansen sought were not in “Covered Employment” because there was no claim or evidence in the record that contributions were paid or payable for them. See Hansen, 2017 WL 4539217, at *9. However, whether contributions were required for workers' compensation, unemployment compensation, and vacation benefits would be found in the collective bargaining agreements (“CBA”) between the IUPAT and Hansen's employers. Id. The CBAs were not included in the administrative record, nor did it appear that the Board considered them in denying Hansen benefits. Id. at *10. As a result, we concluded that the Board's denial of Hansen's disability pension was not based on substantial evidence and remanded the matter to the Board “for a determination of whether [Hansen's] employer[s] w[ere] obligated to make contributions to the Pension Plan pursuant to [the] [CBAs] between [Hansen's] employer[s] and the [IUPAT].” (Doc. No. 17.)

         Following our remand Order, Defendants provided Hansen with three separate CBAs that were in effect during the relevant time period. (Pl.'s Mem. Law Supp. Mot. Summ. J. 4.) The substantive portions of the CBAs are identical, with only the pay rates for various employers differing. (Id.) In January 2018, Hansen submitted a “Memorandum to the IUPAT Board of Trustees Pursuant to the October 11, 2017 Memorandum Opinion and Order of Judge Robert F. Kelly” that advanced his arguments regarding why the CBAs required Defendants to credit him with additional “Hours of Service” in “Covered Employment, ” such that he met the eligibility requirements for a disability pension. (Id.; see also AR 1189-1200.[1])

         The Board considered Hansen's appeal at a January 2018 meeting and reaffirmed the denial of benefits in a letter dated February 7, 2018. (Id.; AR 1201-06.) In the denial letter, the Board stated that “the specific terms of the [CBAs] were not addressed in the original appeal” and that, while the Board included members familiar with the CBAs, “the actual contracts help complete the record.” (AR 1203.) As to additional hours for workers' compensation and unemployment compensation, the Board concluded that Hansen was not entitled to credit for them because they were not “Hours of Service” nor in “Covered Employment.” (Id. at 1204.) Regarding vacation benefits, the Board found that the $822 amount on Hansen's W-2 forms, (see Id. at 116-17), did “not reflect any actual vacation hours taken by Hansen and [was] simply a supplemental wage for each ‘hour paid' under the agreement.”[2] (Id. at 1204.) Thus, the Board concluded that, although the CBAs did not require Hansen's employers to pay contributions to the Pension Plan for his theoretical vacation time, “the only possible calculation of such hours would be to take the amount of vacation pay received and then divide that by Hansen's wage rate for the same period.” (Id. at 1205.) After dividing the $822 in vacation pay by Hansen's lower wage rate of $32.69 per hour, the Board found that, at most, Hansen would be entitled to credit for twenty-six vacation hours. (Id.) The addition of twenty-six hours would put Hansen at 920 hours for purposes of a disability pension, an amount still short of the 1, 000-hour requirement. (Id.)

         On February 23, 2018, Hansen filed a “Motion for Relief From IUPAT Board of Trustee's Remand Decision and to Reopen Case” pursuant to Federal Rule of Civil Procedure 60(b). We granted Hansen's Rule 60(b) Motion, returned the case to the active docket, and subsequently issued a Scheduling Order providing deadlines to file the Supplemental Administrative Record and Cross-Motions for Summary Judgment. As indicated above in the margin, the parties filed the Supplemental Administrative Record on March 26, 2018, and Cross-Motions for Summary Judgment were filed on April 25, 2018. Pursuant to our Scheduling Order, the parties also filed responses to the Cross-Motions on May 25, 2018.

         II. ...


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