1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-31-1995

Agathos v Motel

Precedential or Non-Precedential:

Docket 94-5382

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Recommended Citation

"Agathos v Motel" (1995). 1995 Decisions. Paper 89.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/89
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 No. 94-5382 

 

 JOHN AGATHOS; and LEONARD DEMARSICO, 

 as Trustees of the Local 4-69 Welfare 

 Fund and the Local 4-69 Pension Fund and 

 Local 69, Hotel Employees and Restaurant 

 Employees International Union, by its 

 President, John Agathos 

 Appellants 

v. 

 STARLITE MOTEL 

 

 On Appeal from the United States District Court 

 for the District of New Jersey 

 (D.C. No. 89-cv-02429) 

 

 Argued: February 17, 1995 

 BEFORE: STAPLETON and COWEN, Circuit Judges

 HUYETT, District Judge* 

 (Filed March 31, 1995) 

Diana L.S. Peters 

Gerald M. Feder (argued) 

Feder & Associates, P.C. 

1350 Connecticut Avenue, N.W. 

Suite 600 

Washington, D.C. 20036 

 Counsel for Appellants 

 John Agathos and Leonard DeMarsico 

 
*Honorable Daniel H. Huyett 3rd, United States District Judge for 

 the Eastern District of Pennsylvania, sitting by designation. 

John A. Craner (argued) 

Craner, Nelson, Satkin & Scheer 

320 Park Avenue 

P.O. Box 367 

Scotch Plains, NJ 07076 

 Counsel for Appellee 

 Starlite Motel 

 

 OPINION OF THE COURT 

 

Cowen, Circuit Judge: 

 John Agathos and Leonard DeMarsico, plaintiff trustees (the 

"Trustees") of the jointly administered Local 4-69 Welfare Fund 

(the "Welfare Fund") and the Local 4-69 Pension Fund (the 

"Pension Fund") appeal from an order of the district court that 

granted judgment in favor of defendant Starlite Motel 

("Starlite") on claims under a collective bargaining agreement.1 

In essence, the Trustees argue that the district court erred in: 

(1) determining that the Welfare Fund was not legally entitled to 

recover benefits paid to an ineligible employee in reliance on 

false statements made by Starlite; (2) concluding that only 

current Starlite employees could have colorable claims against 

the Pension Fund for benefits; (3) concluding that two current 

 

1. In the original complaint in this matter, Local 69 (the 

"Union") also sought union dues on behalf of Starlite's 

unreported employees. The Union is not pursuing its claims in 

this appeal. 
employees do not have colorable claims for pension benefits; and 

(4) concluding that a one year time limit for filing precludes 

claims for welfare benefits. Because the district court 

correctly determined that the Welfare Fund was not entitled to 

recover benefits paid to the ineligible employee, we will affirm 

the district court's order in part. Nevertheless, because we 

conclude that the district court failed to make factual findings 

and conclusions of law sufficient to determine whether the past 

and present employees of Starlite have colorable claims for 

pension and welfare benefits, we will reverse and remand on the 

remaining issues raised by the Trustees. 

I. 

 The Local 4-69 Welfare Fund and the Local 4-69 Pension Fund 

(collectively "the Funds") are multiemployer employee benefit 

plans that were established in accordance with Section 302(c)(5) 

of the Labor-Management Relations Act of 1947 (as amended), and 

that are within the purview of the Employee Retirement Income 

Security Act of 1974 (as amended) ("ERISA"). Pursuant to ERISA 

and the Labor-Management Relations Act, contributions that 

employers owe under collective bargaining agreements are pooled 

to provide the benefits for all the participants and 

beneficiaries of the Funds. 

 On May 31, 1979, Starlite entered into a collective 

bargaining agreement that required it to make contributions to 

the Welfare and Pension Funds on behalf of its employees. 

Zuzanna Podkowa ("Podkowa") was an employee of Starlite until 
June 30, 1986. At that time, she terminated her employment. 

After leaving Starlite, Podkowa submitted medical claims to the 

Welfare Fund even though she was no longer eligible for such 

benefits. The Welfare Fund paid her $11,203.67 in benefits 

relying on a false report from Starlite that Podkowa was still 

employed. 

 Because of information disclosed as the result of Podkowa's 

claim, the Funds sought an audit of Starlite's books. Starlite 

refused the audit and the Funds sued. An audit of Starlite's 

records covering the period from January 1, 1984 to December 31, 

1990 conducted during discovery demonstrated that Starlite failed 

to report a number of employees who were covered by the 

collective bargaining agreement. In addition, Starlite failed to 

make contributions to the Funds on behalf of these employees. 

The contributions due from Starlite totalled $52,665.00 for the 

Welfare Fund and $14,756.00 for the Pension Fund. 

 Without taking further evidence, the district court heard 

legal arguments on the above stipulated facts. The court 

concluded that the payments made to Podkowa were made as a result 

of the failure of the Funds to conduct even the most minimal 

policing of Starlite's account, and denied recovery. Agathos v. 

Starlite Motel, No. 89-2429, slip op. at 11 (D.N.J. Dec. 20, 

1991). Concerning the unreported employees, the district court 

concluded that the Funds suffered no damages because the 

unreported employees were never covered by the Funds and thus 

could not have made any claims for pension or welfare benefits. 

Id. at 8-9. An appeal to this Court followed. 
 On appeal, we vacated the district court's judgment and 

remanded for further proceedings. Agathos v. Starlite Motel, 977 

F.2d 1500, 1510 (3d Cir. 1992). We determined that the district 

court failed to make clear the precise legal principles it 

considered in reaching its decision concerning the benefits paid 

to Podkowa. Id. at 1508. Accordingly, we remanded to the 

district court for it to decide whether the Funds could meet 

their burden of proving either fraud or breach of contract on the 

part of Starlite. Id.

 With respect to the claims for Welfare and Pension Fund 

contribution, we determined that we were unable to discern from 

the record which employees, if any, presently could bring a valid 

claim for benefits. Id. at 1507. We explained that if the 

employees cannot assert such claims, then a judgment for the 

Funds would compel Starlite to contribute to plans from which its 

employees obtained no benefits in the past and are powerless to 

derive any benefits in the future, a result that we described as 

a "pure windfall." Id. We therefore directed the district court 

to conduct an evidentiary hearing to determine which, if any, 

unreported employees currently have colorable claims against the 

Funds for benefits. Id. Further, we explicitly placed the 

burden of proof on Starlite to demonstrate that particular 

employees no longer had colorable claims for benefits if Starlite 

wished to avoid making contributions on behalf of those 

employees. Id. at 1507-08. 

 The district court on remand held an evidentiary hearing. 

At the hearing, the Trustees of the Welfare Fund admitted into 
evidence a written document attesting to the fact that on 

December 2, 1992 (after our first decision in this matter), the 

Trustees unanimously adopted a resolution to waive the time 

limits on submission of medical claims to the Welfare Fund for 

individuals for whom contributions should have been made by 

Starlite. According to the Trustees, this waiver allows each of 

these employees to submit claims for welfare benefits without 

regard to any previously imposed time bar. 

 The district court rendered its decision following this 

hearing in a three page order. The court determined that the 

Funds had not met their burden of proof in proving fraud or 

breach of contract with regard to their claim for monies paid to 

Podkowa. According to the court, the Funds had not proven that 

they "were justified in relying" on Starlite's misrepresentation 

to their detriment and the Funds had not proven that the damages 

they sought flowed foreseeably from Starlite's breach. Agathos 

v. Starlite Motel, No. 89-2429, slip op. at 3 (D.N.J. May 27, 

1994). The court again cited the failure of the Funds to police 

the Starlite account as the source of the damages at issue. Id.

 With respect to the claims for contribution, the district 

court stated that: 

 [H]aving determined that only two current employees of 

Starlite -- Luba Siemienuk and Mieczslaw Zielinski -- were 

also employed by Starlite during the period for which 

contributions are sought, and it having been represented to 

the court that neither employee presently could bring a 

valid claim for benefits accruing during the period for 

which contributions are now sought, and, indeed, that 

neither employee even has a claim for either welfare or 

pension benefits and, thus, as a matter of law any judgment 

for the Funds under the circumstances would be a pure 
windfall . . . judgment will be entered in favor of 

defendant. 

Id. at 2-3 (internal quotation marks and citations omitted). The 

district court also stated in a footnote that: 

 There are no medical bills to submit, there are no claims 

for pensions because pensions have not vested, and, in any 

event, claims must be and were not submitted within one year 

from the date the claim was first incurred. Def. Exh. 4, 8. 

While, following the Court of Appeals' decision and based on 

the "tenor" of that decision, the Funds purported to waive 

the time limits for the submission of medical claims during 

the period for which contributions were sought (thus 

implicitly requiring those contributions to be made in an 

attempt to back door both this court and the Court of 

Appeals, see Def. Exh. 5), the undisputed fact remains that 

only Ms. Siemienuk and Mr. Zielinski continue to work for 

Starlite and only they would qualify for benefits if they 

had colorable claims, which they do not. 

Id. at 2 n.2. Accordingly, the district court entered judgment 

in favor of Starlite on May 27, 1994. This appeal followed. 

II. 

 The district court had jurisdiction in this matter by virtue 

of Section 502(e)(1) of ERISA, codified at 29 U.S.C. § 

1132(e)(1). We exercise jurisdiction in this matter pursuant to 

28 U.S.C. § 1291 following the remand that we directed and the 

final judgment entered by the district court. 

III. 

 The Trustees argue that the district court erred in denying 

the Welfare Fund recovery for the benefits it paid to Podkowa. 

According to the Trustees, Starlite committed fraud and breached 
its contractual obligations by misrepresenting that Podkowa was a 

current employee at the time she made her claim for welfare 

benefits. Further, the Trustees assert that the district court 

failed to take into account the realities in which multiemployer 

plans operate with respect to their abilities to police 

employer's accounts. We are unpersuaded by the Trustees' 

arguments. 

 In our previous decision, we outlined the applicable legal 

principles for the district court to consider in assessing 

whether the Trustees could meet their burden of proving fraud or 

breach of contract. Agathos, 977 F.2d at 1508. We explained 

that under general principles of tort law, the elements of fraud 

are: (1) a material factual misrepresentation; (2) made with 

knowledge or belief of its falsity; (3) with the intention that 

the other party rely thereon; (4) resulting in justifiable 

reliance to that party to his detriment. Id. (citing Restatement 

(Second) of Torts §§ 525-26 (1977)). Further, we explained that 

for the Funds to recover for breach of the collective bargaining 

agreement, the Funds had to show that: (1) Starlite had a 

contractual obligation not to make reports or to remit 

contributions on behalf of individuals no longer in Starlite's 

employ; (2) Starlite breached this obligation; and (3) the 

damages sought by the Funds foreseeably flowed from the breach. 

Id. at 1509. We directed the district court to make clear the 

precise legal principles it considered in reaching its decision. 

Id. at 1508. 
 Upon remand, the district court did make clear the precise 

legal principles it relied upon in denying the Welfare Fund2

recovery for the benefits it paid to Podkowa. With respect to 

the fraud claim, the district court found that while the Welfare 

Fund proved that Starlite made a material factual 

misrepresentation with knowledge of its falsity and with the 

intent that the Fund would rely on it, the Fund did not prove 

that it was "justified in relying on that misrepresentation" 

because the Fund "`failed to engage in even the most minimal 

policing of the Starlite account.'" Agathos, No. 89-2429, slip 

op. at 3 (D.N.J. May 27, 1994) (quoting Agathos, 977 F.2d at 

1508). According to the district court, it was the Welfare 

Fund's inaction that caused it to pay money to Podkowa that 

otherwise would not have been paid. Id. Because the district 

court determined that the Welfare Fund failed to meet its burden 

of proof on the element of justifiable reliance, we find that the 

court satisfied its obligation to articulate the precise legal 

principle under which it denied the Welfare Fund recovery. 

 Similarly, with respect to the breach of contract claim, the 

district court concluded that while the Welfare Fund proved that 

Starlite breached its contractual obligation not to make reports 

on behalf of individuals no longer in its employ, the Fund did 

 

2. In its decision concerning the benefits paid to Podkowa, the 

district court consistently referred to "the Funds" as the entity 

with the dispute and burden of proof. Agathos, No. 89-2429, slip 

op. at 3 (D.N.J. May 27, 1994). Since the benefits paid to 

Podkowa were paid pursuant to the policies of the Welfare Fund, 

it is more precise to refer specifically to that entity rather 

than to "the Funds" in general when discussing this claim. 
not prove that the damages it sought flowed from that breach 

rather than from the Welfare Fund's failure even minimally to 

police the Starlite account. Id. Since the district court 

determined that the Fund failed to satisfy an essential element 

of a breach of contract claim -- that the damages flow 

"foreseeably from the breach" -- the court also fulfilled its 

obligation to articulate the precise legal principle by which it 

denied the Fund recovery on that claim. Accordingly, we will 

affirm the district court's decision to deny the Welfare Fund 

recovery for benefits paid to Podkowa. 

 The Trustees assert that the district court failed to take 

into account the realities within which multiemployer plans 

operate in determining that the Welfare Fund did not adequately 

police the Starlite account.3 According to the Trustees, most 

multiemployer plans are forced to operate under a self-reporting 

system in which the plans must rely on contributing employers to 

provide information as to which employees are working at any 

given time. While we are sympathetic to the problems such plans 

face in obtaining accurate information, we noted in our previous 

opinion that there was ample record support for the district 

court's finding that the Funds failed to engage in even the most 

minimal policing of the Starlite account. Agathos, 977 F.2d at 

1508. Under such circumstances, we cannot disagree with the 

 

3. The Trustees also argue that the district court's ruling is 

inconsistent with ERISA and applicable precedent. We find 

nothing in the language of ERISA or in the precedents that the 

Trustees cite that creates an inconsistency. 
district court's conclusion that the damages at issue flowed from 

the Welfare Fund's failure to police adequately the Starlite 

account, rather than from the misrepresentation by Starlite. 

Moreover, we believe that such an argument is an attempt by the 

Trustees to relitigate an issue already passed upon by the 

district court and implicitly affirmed by our previous decision 

in this matter. Accordingly, we are unpersuaded by the Trustees' 

arguments and we will uphold the decision of the district court. 

IV. 

 The Trustees' next argument is that the district court erred 

by concluding that only current Starlite employees could have 

colorable claims against the Pension Fund for benefits. 

According to the Trustees, the district court erroneously 

interpreted our previous opinion to preclude colorable claims 

against Pension Fund benefits by employees who worked for 

Starlite in the past. This error, the Trustees argue, improperly 

led the district court to limit its evidentiary hearing to a 

consideration of only those employees who had both worked for 

Starlite during the period for which contribution is sought4 and 

who are presently still working for Starlite. The Trustees 

assert that the district court erred by failing to consider 

 

4. The "period for which contribution is sought" is defined by 

the audit of Starlite's records conducted during discovery. The 

audit covered the period from January 1, 1984 to December 31, 

1990. Employees who worked for Starlite during the period for 

which contribution is sought, but who are not currently working 

for Starlite, are sometimes referred to in this opinion as "past 

employees" for purposes of convenience. 
employees who had earned credits toward pension vesting for time 

worked during the period for which contribution is sought, but 

who have now moved on to other employment. 

 The district court's three page decision in this matter does 

not provide an adequate basis to defeat the Trustees' argument. 

The district court's opinion states that "having determined that 

only two current employees of Starlite . . . were also employed 

by Starlite during the period for which contributions were 

sought, and it having been represented to the court that neither 

employee `presently could bring a valid claim for benefits,'" 

any judgment for the Funds "`would be a pure windfall.'" 

Agathos, No. 89-2429, slip op. at 2 (D.N.J. May 27, 1994) (citing 

Agathos, 977 F.2d at 1507). This statement fuels the Trustees' 

argument that the district court limited the evidentiary hearing 

to present employees. Even more importantly, however, the 

district court simply made no findings concerning whether any 

past employees currently have a colorable claim for pension 

benefits. Accordingly, we must determine whether the district 

court erred by failing to make such findings. 

 In our previous opinion, we explained that whether employees 

presently have a colorable claim for benefits depends on whether 

they would be able to submit claims against fully back-dated 

coverage once Starlite makes the requested contributions. 

Agathos, 977 F.2d at 1508. We further explained that: 

 An employee has no colorable claim if a plan would not 

properly entertain the claim because it is time-barred, the 

employee has ceased working for Starlite and therefore no 

longer qualifies, or federal labor law precludes recovery. 
If, however, a Fund would be required to honor an employee's 

claim, then Starlite must contribute for that employee 

regardless of whether he or she in fact has a meritorious 

claim.

Id. (emphasis added). Concededly, one possible reading of this 

language in our previous opinion is that if an employee has 

ceased working for Starlite, the employee no longer has a 

colorable claim for any benefits. Such a reading, however, does 

not give full effect to all the words in the above-quoted 

passage, and is certainly contrary to this Court's intentions. 

 The key phrase in the quoted passage that defines when an 

employee no longer has a colorable claim is, "if the plan would 

not properly entertain the claim." Our list of possible 

scenarios when the plan might not entertain such claims, such as 

when a claim is time-barred, when an employee has ceased working 

for Starlite, or when Federal labor law precludes recovery, was 

not intended to be applied by mere incantation. This principle 

is made clear by our final sentence which states that "if, 

however, a Fund would be required to honor an employee's claim, 

then Starlite must contribute for that employee regardless of 

whether he or she in fact has a meritorious claim." 

 The error in an interpretation which prevents consideration 

of past employees who may have claims for pension5 benefits is 

aptly pointed out by the Trustees' argument. As the Trustees 

 

5. Further supporting our reasoning in this case is the fact 

that in the paragraph at issue in our original decision we did 

not distinguish between the Pension Fund and the Welfare Fund. 

Accordingly, we were not focusing on the intricacies of each 

specific Fund's requirements for bringing claims for benefits 

based on past employment. 
correctly state, there may be employees who worked for Starlite 

during the period for which contribution is sought, who are not 

presently working for Starlite, but who nevertheless earned 

credit toward pension vesting. It is undisputed that under the 

terms of the Pension Plan, an employee is required to work for 

ten years before the employee's pension vests. It is also 

undisputed that if an employee ceases working for Starlite but 

obtains covered employment6 with another employer, that 

employee's years of service at Starlite will be counted toward 

the employee's retirement benefits unless he or she incurs a 

break in service that is not cured under the rules of the plan 

and/or under ERISA. Thus, there may well be employees who worked 

for Starlite in the past, who are not working for Starlite now, 

but who moved on to other covered employment. Such employees 

would have claims for benefits once they have completed the 

requisite number of years of service. Accordingly, an 

interpretation of our previous opinion which does not provide for 

consideration of these past employees is erroneous.7

 

6. "Covered employment" is defined as employment with employers 

who: (1) have been accepted for participation in the plan by the 

Trustees; (2) have collective bargaining agreements requiring 

contributions to be made to the Fund; and (3) have become a party 

to the pension trust agreement. Local No. 4-69 Pension Fund of 

the Hotel & Restaurant Employees & Bartenders Union; App. at 

136(a). Thus, under the plan, an employee is able to move from 

one participating employer to another without loss of years 

earned toward vesting. 

7. In arguing that the analysis of colorable claims for pension 

benefits should not be limited to current employees, the Trustees 

referenced past employees who continued in covered employment 

after leaving Starlite. We perceive no reason why past employees 
 Starlite countered this position at oral argument by 

suggesting that all past employees have incurred a break in 

service.8 Because the district court made no findings concerning 

past employees, we are unable to determine from this record 

whether these past employees have incurred a break in service. 

We do point out, however, that our previous opinion explicitly 

placed the burden on Starlite to prove which, if any, employees 

do not have colorable claims against the Pension Fund in order to 

avoid making contributions for those employees. If Starlite is 

unable to fulfill its burden, it must make the requisite 

contributions.9 Accordingly, we will again reverse and remand 

this case to the district court for an evidentiary hearing to 

determine which, if any, unreported past Starlite employees 

currently have colorable claims for benefits. At this hearing, 

the district court must focus on the specific reasons why the 

past employees do not have a colorable claim for benefits and 

must make appropriate findings as to those employees that 

Starlite has demonstrated do not have a colorable claim for 

benefits. 

(..continued) 

who worked in covered employment before their tenure with 

Starlite could not also have colorable claims for benefits. 

8. A "break in service" is defined by the plan and occurs when 

an employee fails to work a requisite number of hours in two 

consecutive years in "covered employment." App. at 137a. 

9. Starlite argues that the Trustees have the burden of proving 

that its past employees have not incurred a break in service. 

Appellee's Brief at 19 n.7. We are puzzled by Starlite's 

position since our previous opinion was explicit on the question 

of who bears the burden of proof and it makes clear that the 

burden falls on Starlite. Agathos, 977 F.2d at 1507-08. 
V. 

 We next address the Trustees' claim that the district court 

erred in determining that the two current employees who also 

worked for Starlite during the period for which contribution is 

sought do not have colorable claims for pension benefits. 

According to the Trustees, the district court confused a 

colorable claim with a present claim for vested pension benefits 

in evaluating whether Starlite should make contributions on 

behalf of these employees. The Trustees once again press their 

claim that while these employees have not yet worked enough years 

to have vested pensions, they may combine past years of service 

with future years of service and therefore they have potential 

claims against the Pension Fund. 

 We review the district court's findings of fact for clear 

error. Epstein Family Partnership v. Kmart Corp., 13 F.3d 762, 

765-66 (3d Cir. 1994). We exercise plenary review over the 

district court's application of the law to those facts. Id. at 

766. The district court found that Luba Siemienuk and Mieczslaw 

Zielinski, the two current employees who also worked for Starlite 

during the period for which contribution is sought, do not have 

colorable claims for pension benefits. Agathos, No. 89-24-29, 

slip op. at 2 n.2 (D.N.J. May 27, 1994). According to the 

district court, there are no claims for pensions because pensions 

have not vested. Id. 

 While we accept the district court's factual conclusion that 

no pensions have vested, we are unable to find that this fact is 
dispositive of the relevant issue. As the Trustees point out, a 

colorable claim for pension benefits does not depend on whether 

the employees' pensions have vested. These employees may not yet 

have worked the requisite number of years for vesting, but the 

pension plan permits them to combine the time they have worked in 

the past with additional years worked in the future in order to 

complete the requisite number of years (assuming they have 

incurred no break in service).10

 Once again, Starlite argues in its brief that these two 

employees have incurred a break in service. Appellee's Brief at 

14. Unfortunately, there is nothing in the district court's 

factual findings to support this conclusion. Starlite may be 

correct, but sitting as an appellate court we are not in a 

position to make findings of fact. See, e.g., Gilgillan v. City 

of Philadelphia, 637 F.2d 924, 931 n.6 (3d Cir. 1980), cert.

denied, 451 U.S. 987, 101 S. Ct. 2322 (1981). Accordingly, we 

will also reverse and remand on the question of whether Starlite 

is liable for contributions to the Pension Fund on behalf of Luba 

Siemienuk and Mieczslaw Zielinski. On remand, the district court 

 

10. These employees would have claims for "credited service." 

We have previously held that a claim for credited service does 

not give rise to a "colorable claim" to vested benefits. Shawley 

v. Bethlehem Steel Corp., 989 F.2d 652, 656 (3d Cir. 1993). In 

Shawley, we said "neither plaintiffs' credited service . . . nor 

the accrued benefit to which it gives rise is a `vested' benefit 

under [a pension plan] that would grant participant status" and 

give the employees standing to sue the pension plan under ERISA. 

Id. Shawley does not preclude the existence of colorable claims 

in this case because the issue here is not whether former 

employees may currently sue the Pension Fund, but whether a 

future liability is sufficiently likely to justify requiring the 

employer to contribute to the Fund. 
must make a finding as to whether these employees incurred a 

break in service or another deficiency that would prevent them 

from having colorable claims for pension benefits. If no such 

break in service or other deficiency exists, Starlite must make 

the requisite contributions on behalf of these employees. 

VI. 

 The Trustees' final claim is that the district court erred 

by concluding that no one who worked for Starlite during the 

period for which contribution is sought has a colorable claim for 

welfare benefits. According to the Trustees, the district court 

erroneously concluded that a one year time bar for submission of 

claims against the Welfare Fund could not be waived and barred 

all subsequent claims.11 The Trustees assert that they validly 

waived the time bar for submission of claims against the Welfare 

Fund in order to allow those employees who were covered for 

medical benefits, but who never received notice of such coverage, 

to submit claims. 

 

11. Counsel for the Trustees points out in its brief that 

according to the Summary Plan Description of the Local 4-69 

Welfare Fund, a document inadvertently not offered into evidence 

at the evidentiary hearing, the actual time for submitting a 

claim for benefits is 90 days from the date on which a loss was 

first sustained. Appellants' Brief at 35. The Trustees explain 

that the one year time bar derives solely from a letter from the 

Fund's former counsel which was admitted into evidence. We are 

not inclined to comment on the appropriate time period that 

governs such claims given the fact that the Summary Plan 

Description was not offered into evidence. Nevertheless, the 

difference between the one year and 90 day rules does not appear 

relevant to the claim of the appellants that the district court 

erred in determining that the Trustees could not waive the time 

limitation. 
 Our review over questions of law such as the validity of the 

waiver is plenary. Epstein, 13 F.3d at 766. The district court 

engaged in a two-part analysis on the question of whether 

Starlite was liable for Welfare Fund contributions. First, the 

district court determined that only two current employees -- Luba 

Siemienuk and Mieczslaw Zielinski -- were also employed by 

Starlite during the period for which contributions were sought. 

Agathos, No. 89-2429, slip op. at 2 (D.N.J. May 27, 1994). 

Second, the district court determined that these two employees 

did not have medical claims to submit and "in any event, claims 

must be and were not submitted within one year from the date the 

claim was first incurred." Id. at 2 n.2. 

 As we explained with respect to the Pension Fund, to the 

extent that the district court's opinion interprets our previous 

decision to summarily exclude past employees from consideration 

of whether these employees have "colorable claims," the district 

court erred.12 Thus, the essential issue that remains is whether 

all claims against the Welfare Fund for the period in question, 

by both past and present Starlite employees, are barred by a time 

limitation for filing. The district court determined that the 

Trustees' purported waiver of the time for filing requirement was 

"an attempt to back door both this court and the Court of 

Appeals." Id. We disagree. 

 On December 2, 1992, the Trustees of the Local 4-69 

Welfare Fund held a meeting and adopted a unanimous resolution to 

 

12. See supra part IV. 
waive the time limits for submitting medical claims for those 

employees for whom contributions should have been made by 

Starlite. App. at 225a-27a. According to the minutes of that 

meeting, the purpose of the waiver was to: 

 permit individuals for whom contributions should have been 

made under the collective bargaining agreement to submit 

medical bills to the Fund and to have the same paid in 

accordance with the then coverages of the Fund. 

Id. at 226a. The Trustees assert that because the unreported 

employees were never made aware that they had coverage under the 

Welfare Fund, they could not have previously submitted claims for 

benefits and thus should be permitted to file claims now. 

 The district court did not analyze whether the Trustees were 

authorized to waive the time limitation, it merely concluded that 

such a "back door" tactic was inappropriate. After examining the 

Trust Agreement, we observe that Article V, § 17 vests in the 

Trustees the "full and exclusive authority to determine all 

questions of coverage and eligibility, methods of providing or 

arranging for benefits and all other related matters." App. at 

114a. In addition, Article V, § 9(e) grants the Trustees the 

power to "do all acts, whether or not expressly authorized herein 

which the Trustees may deem necessary or proper for the 

protection of the property held hereunder." App. at 109a. Given 

such broad powers, and in light of the Trustees' reasonable 

position that unreported plan participants could not have 

submitted claims within the original claims period if they had 

never been notified that they were entitled to benefits, we 
cannot agree that the Trustees have acted improperly in lifting 

the time bar.13 Accordingly, we will reverse the district court 

in its decision to give the time bar preclusive effect. 

 On remand, the district court should consider the fact that 

our previous decision placed the burden of proof on Starlite to 

prove whether or not employees have colorable claims for Welfare 

benefits. Agathos, 977 F.2d at 1507-08. Accordingly, the 

district court must make findings of fact with respect to all the 

past and present employees who worked during the period for which 

contribution is sought in order to ascertain whether Starlite has 

satisfied its burden of proving that particular employees do not 

have colorable claims against the Welfare Fund.14 If Starlite 

cannot satisfy its burden as to one or more employees, it must 

make contributions to the Welfare Fund on behalf of those 

employees. 

 

13. Our position is also in accord with two of the fundamental 

assumptions underlying ERISA, i.e., that trustees of plans: (1) 

take steps to identify all participants and beneficiaries, so 

that the trustees can make them aware of their status and rights 

and (2) act to ensure that a plan receives all funds to which it 

is entitled. See Central States, Southeast and Southwest Areas 

Pension Fund v. Central Transport Inc., 472 U.S. 559, 571-72, 105 

S. Ct. 2833, 2841 (1985). 

14. The Trustees assert that our previous opinion defined a 

colorable claim to welfare benefits to be a colorable claim to 

coverage during the relevant period. We disagree. We believe 

that a colorable claim against the Welfare Fund must be based on 

an actual illness or injury during the covered period. 

 With respect to Siemienuk and Zielinski, the district court 

stated that there are "no medical bills to submit," but 

ultimately rested its conclusion on the applicability of the time 

bar. If the district court is satisfied that Starlite has met 

its burden of proof concerning these two present employees 

(without regard to the time bar) it should so indicate on remand. 
 CONCLUSION 

 In sum, because the district court correctly concluded that 

the Trustees failed to prove the essential elements of fraud or 

breach of contract, we will affirm that court's order denying the 

Welfare Fund recovery for benefits paid to Ms. Podkowa. 

Nevertheless, because the district court erred in not making 

findings concerning whether past employees have colorable claims 

against the Pension Fund, we will reverse the district court's 

order in part and remand for further proceedings. Further, 

because the district court confused a colorable claim with a 

vested claim for pension benefits, we will also reverse the 

district court's order denying the Pension Fund contribution for 

two current employees of Starlite and we will remand for further 

findings. Finally, because the district court erred in 

concluding that the Trustees could not waive the time requirement 

for filing claims against the Welfare Fund, we will also reverse 

on this issue and remand for further findings consistent with 

this opinion.