Source: https://law.justia.com/cases/federal/appellate-courts/F2/954/1116/128451/
Timestamp: 2020-05-25 18:33:32
Document Index: 599986758

Matched Legal Cases: ['§ 1132', '§ 1113', '§ 1113', '§ 1132', '§ 1113', '§ 1132', '§ 1132', 'art. 3499', '§ 1132', '§ 1113']

Willie H. Kennedy, Plaintiff-appellee, v. Electricians Pension Plan, Ibew # 995, et al., Defendants-appellants, 954 F.2d 1116 (5th Cir. 1992) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1992 › Willie H. Kennedy, Plaintiff-appellee, v. Electricians Pension Plan, Ibew # 995, et al., Defendants-...
Willie H. Kennedy, Plaintiff-appellee, v. Electricians Pension Plan, Ibew # 995, et al., Defendants-appellants, 954 F.2d 1116 (5th Cir. 1992)
US Court of Appeals for the Fifth Circuit - 954 F.2d 1116 (5th Cir. 1992) March 6, 1992
Section 1. PAST SERVICE PENSION CREDITS--FOR PERIODS PRIOR TO OCTOBER 1, 1970. It is recognized that it would be difficult for some Employees to prove where they worked in Covered Employment for the Years Prior to the time the Pension Plan started, and therefore a conclusive presumption is established that an Employee was engaged in Covered Employment throughout the period of his continuous membership in the Union between October 1, 1950 and October 1, 1970. All Employees who were members in good standing of the Union on October 1, 19703 , shall be given credit for Past Service for all years of continuous and unbroken membership in the Union dating back from that date. (emphasis added)
Kennedy's declaratory judgment suit was filed pursuant to 29 U.S.C. § 1132(a) (1) (B) of ERISA, which allows a participant to "clarify his rights to future benefits." The district court concluded that the Trustees abused their discretion in deciding that Kennedy was not eligible for past service credit during his apprenticeship. The court also held that Kennedy was not barred from bringing this suit by a statute of limitations or the equitable doctrine of laches.
The district court held that the time bar in § 1113 was inapplicable. That legal decision is subject to a de novo standard of review by this court. This suit is not an action "with respect to a fiduciary's breach of any responsibility, duty or obligation" under § 1113. Rather, as we have stated, Kennedy is seeking to "to clarify his rights to future benefits" as specifically authorized by § 1132(a) (1) (B). Congress limited the application of § 1113 "to suits claiming breach of an ERISA trustee's fiduciary duty 'under this part,' which does not include beneficiary suits under § 1132(a) (1) (B)." Johnson v. State Mut. Life Assur. Co. of America, 942 F.2d 1260, 1262 (8th Cir. 1991). Thus, Kennedy's action to clarify his future rights under the Plan is not subject to the three year statute of limitations applicable to actions for breach of fiduciary duty.
Because ERISA does not provide a statute of limitations for actions brought to clarify rights to future benefits under § 1132(a) (1) (B), we look to state law for the applicable time limit. See McClure v. Zoecon, Inc., 936 F.2d 777, 778 (5th Cir. 1991); see also DelCostello v. Teamsters, 462 U.S. 151, 103 S. Ct. 2281, 76 L. Ed. 2d 476 (1983) (when a federal cause of action fails to supply an express statute of limitations "Congress intended that the courts apply the most closely analogous statute of limitations under state law." Id. at 158, 103 S. Ct. at 2287).4 Personal actions are subject to a ten year prescriptive period. La.Civ.Code Ann. art. 3499. An action to clarify pension benefits is a personal action.5 Kennedy brought this suit on 14 August 1989, less than ten years after he received his first notice from the Plan. Assuming that the statute began to run when Kennedy received his first notice, his suit brought within ten years from the date of receipt is timely.
We also affirm the finding of the district court that Kennedy's suit is not barred by the equitable doctrine of laches. The district court's decision will only be reversed for abuse of discretion. Geyen v. Marsh, 775 F.2d 1303, 1310 (5th Cir. 1985), reh'g denied 782 F.2d 1351 (1986). Considering the facts of this case, we do not find that the Appellants were prejudiced by any delay in the commencement of this action. See Gutierrez v. Waterman S.S. Corp., 373 U.S. 206, 215, 83 S. Ct. 1185, 1191, 10 L. Ed. 2d 297 (1963) ("test of laches is prejudice to other party"); Gardner v. Panama R.R. Co., 342 U.S. 29, 31, 72 S. Ct. 12, 13, 96 L. Ed. 31 (1951) ("where no prejudice to the defendant has ensued from the mere passage of time, there should be no bar to relief").
We now turn to the decision of the Trustees. Before examining the Trustees decision that denied Kennedy past service credit for his stint as an apprentice, we must determine the applicable standard of review. The Supreme Court has held that courts should review a denial of benefits challenged under § 1132(a) (1) (B) under a de novo standard "unless the benefit Plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the Plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S. Ct. 948, 103 L. Ed. 2d 80 (1989). If the benefit Plan gives administrators such authority, then the abuse of discretion standard will be our measuring stick. See Vasseur v. Halliburton Co., 950 F.2d 1002, 1006 (5th Cir. 1992); Pierre v. Connecticut Gen. Life Ins. Co., 932 F.2d 1552, 1556 (5th Cir.), cert. denied, --- U.S. ----, 112 S. Ct. 453, 116 L. Ed. 2d 470 (1991); Penn v. Howe-Baker Engineers, Inc., 898 F.2d 1096, 1099 (5th Cir. 1990).
Under the terms of the Plan, the Trustees are vested with the authority to interpret and construe the past service credit provisions: "The decision of the Trustees as to the amount of Past Service Credits granted to an Employee shall be final and binding." [Article 3, Section 3.12(a) ]. Further, the Plan provides that " [t]he Trustees shall be the sole judges of the standard of proof required in any case and of the application and interpretation of this Plan, and the decisions of the Trustees shall be final and binding on all parties." (Section 6.03). Accordingly, we review the Trustees' interpretation of the provisions governing past service credit for an abuse of discretion.
When reviewing the Trustee's decision, Batchelor v. International Brotherhood of Electrical Workers Local 861 Pension & Retirement Fund, 877 F.2d 441 (5th Cir. 1989),6 directs the district court to determine the legally correct interpretation of the Plan's provisions. Id. at 444 (citing Denton v. First National Bank of Waco, 765 F.2d 1295, 1304 (5th Cir. 1985)). Then, the court must determine if there has been an abuse of discretion in light of the interpretation given the Plan by the Trustees.
In determining the legally correct interpretation of the Plan, we consider three issues: (1) whether the Trustees have given the Plan a uniform construction; (2) whether the Trustees' reading of the Plan is fair and reasonable; and (3) whether the interpretation results in substantial unanticipated costs. Batchelor, 877 F.2d at 444 (citing Dennard v. Richards Group, Inc., 681 F.2d 306, 314 (5th Cir. 1982); see also Jordan v. Cameron Iron Works, Inc., 900 F.2d 53 (5th Cir. 1990), cert. denied, U.S. ----, 111 S. Ct. 344, 112 L. Ed. 2d 308 (1990)).
The district court found it "quite apparent" that the Trustees' interpretation is in direct conflict with the language of the Plan. Kennedy, 755 F. Supp. at 706. We agree that a fair reading of the controlling language would entitle Kennedy to receive credit for his years as an apprentice. The relevant language from the Plan, as amended in 1976, has been quoted previously in this opinion. A reading of this language does not support Appellants' position that the Plan requires initiation into the Union for entitlement to past service credits. The language plainly states that employees who were active members of the "Collective Bargaining Unit" in October 1970 will receive past service credit for every year of continuous and unbroken service in the collective bargaining unit. As we read the Plan, Kennedy's continuous membership in the collective bargaining unit between October 1950 and October 1970, entitled him to Plan coverage.
An additional factor to consider is whether either party's interpretation of the Plan "would give rise to 'substantial unanticipated costs to the Plan.' " Batchelor, 877 F.2d at 445 (citing Lowry v. Bankers Life and Casualty Retirement Plan, 865 F.2d 692, reh'g denied 871 F.2d 522, 524 (5th Cir. 1989)). An interpretation that would result in substantial unanticipated costs may be less likely to be legally correct. Id.
Yet, we are unconvinced that Kennedy's interpretation yields "unanticipated cost." The district court held that the 1976 amendment to the Plan was specifically intended to "extend prior service credit to apprentices." Kennedy, 755 F. Supp. at 707. Although we have not been provided conclusive evidence as to why the qualifications for past service credit were purposely liberalized in 1976, our reading of Section 4.01(b) compels us to agree with the district court. By requiring membership in the Union for eligibility, the original past service credit provision echoes the Trustees current interpretation of the Plan. As previously discussed, this language was amended in 1976 to require only that all employees be "dependant for livelihood on his trade as an Electrician within the jurisdiction of the Union" (emphasis added). The membership requirement was obviously omitted. Appellants have not persuaded us that Kennedy's interpretation of the amended language in any way conflicts with the 1976 amendment.
Kennedy v. Electricians Pension Plan, 755 F. Supp. 700 (M.D. La. 1991)
The Supreme Court has stated that, in the absence of a federal time bar, federal courts "should decline to borrow a state statute of limitations only 'when a rule from elsewhere in federal law clearly provides a closer analogy than available in state statutes, and when the federal policies at stake and the practicalities of litigation make that rule significantly more appropriate.' " Reed v. United Transportation Union, 488 U.S. 319, 324, 109 S. Ct. 621, 625, 102 L. Ed. 2d 665 (1989) (quoting DelCostello, 462 U.S. at 172, 103 S. Ct. at 2294.). In our view, neither § 1113 nor any other federal limitations provides an exception to the general rule
See Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 609 F. Supp. 1302 (E.D. La. 1984) (suit to recover pension benefits is not an action for wages; it is a personal action, subject to the ten year prescriptive period); Greer v. Continental Cas. Co., 347 So. 2d 70 (La.Ct.App.1977) (ten year limitation applicable to suit by employer in which employee alleged employer breached obligations to notify of benefits in retirement policy); State ex rel. Murray v. Board of Trustees of Police Pension Fund for City of New Orleans, 259 So. 2d 613 (La.Ct.App.1972) (retired policemen's suit to increase in pension benefits was personal action subject to ten year limitation)