Court Opinion

ID: 9471955
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:44:55.239869+00
Date Added: 2024-06-11T17:42:39.516951
License: Public Domain

COFFIN, Circuit Judge
(dissenting).
I view the issue before us as one where insistence on at least substantial compliance with detailed requirements is amply justified by the nature of the problem, the intent of the relevant legislation, and the difficulties created by elevating substance over form. On this record, involving a mixed question of fact and law, I cannot say that the district court committed clear error (if error at all), Lynch v. Dukakis, 719 F.2d 504, 513 (1st Cir.1983), and would affirm.
I begin by observing that the decision was not directed to one of two divisions of a company, nor to one of two branches. It was aimed at one of two plants of one division of a company. I therefore approach the case much as if the purported termination concerned the workers in one of two buildings. When I reflect in addition that the plaintiffs, at the time of receiving notice of termination, had worked eleven months of the year — and thereby had contributed most of their year’s work at the end of which they would expect the company’s annual contribution — I do not think it unrealistic to expect a presumably well advised employer to adhere with some care to its own plan.
Here, of course, no case can be made that the company amended the plan. The court properly does not rest on any retroactive amendment. Instead, it rests on a partial termination. In so doing, I fear it strains unduly. It finds authority in the mention of the words “partial ... termination” in a 1976 plan amendment to a provision other than section 12.1, which creates the basic right to terminate. Moreover, although section 11.3 explicitly provides for *18retroactive amendments, section 12.1 is silent not only as to partial terminations but as to retroactive ones. Absent some authority for retroactive effect similar to that covering amendments in section 11.3, I question the validity of such terminations.1 The court, however, assumes that "written notice of the date of ... termination” can be given, although the date has long since passed into history.
Section 12.1 clearly identifies three ingredients of a legal termination: a company exercise of the right to terminate, approval by the Pension Committee, and the giving of written notice of the date of termination to the Trustee. Here we see an undated company letter announcing its decision to terminate the plan subject to an Internal Revenue Service determination, signed by the President and Vice President Finance of Servus Rubber Company. The stipulation tells us only that this was distributed “[sjometime subsequent to August 28, 1981”. This letter gave no indication of a date of termination. On November 12, 1982 the company submitted its application, signed by its president, to Internal Revenue Service. As the district court noted, the application did not indicate that the termination would be “partial” or that the Plan would continue in existence.2 Some two weeks later, on November 25,1981, the Pension Committee voted the partial termination, to be effective as of September 30, 1981.3
As' of November 25, 1981, therefore, the evidence consists of an undated letter of decision to terminate, with no date of termination, sent to participants at some unknown time, followed by a generalized application to the Internal Revenue Service, and purported retroactive approval of the partial termination by the Pension Committee. But even if we blink at all other deficiencies, we face the further fact that at no time has there been compliance with section 12.1’s requirement of “written notice of the date of such termination ... to the Trustee”.
The court sees the absence of such written notice as cured by the happenstance that the “Trustee” consisted of the two company officers who originally had notified the plan participants that there had been a decision to terminate. The court adds that these officers could not have been unaware of the Pension Committee’s subsequent resolution. My problem with this “commonsense” approach, based on assumptions as to who knew what and when, is that it invites litigants and courts to consider the adequacy of conduct not conforming to the plan and to determine what may be accepted as a satisfactory equivalent. For example, had there been no written evidence of a company decision at all, a court might sensibly find that the company officers-trustees met daily with members of the Pension Committee and surely must have known of the Committee’s approval. By the same token, amendments would be susceptible to similarly informal proof. The result would surely be infinitely complex if not unworkable.
The outcome in this case seems to me quite at odds with the terms and policy of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., which place a premium on the scrupulous administration of pension plans. Section 1104 of ERISA, for instance, requires plan trustees to discharge their duties "in *19accordance with the documents and instruments governing the plan____” 29 U.S.C. § 1104(a)(1)(D). Section 1104 was enacted in evident response to Congress’s concern about “the conduct of administration and operations of pension plans”, H.R.Rep. No. 93-533, 93d Cong., 1st Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 4639, 4645, and was intended to “place a ... duty on every fiduciary ... to act ... in accordance with the documents and instruments governing the plan ____”, id. at 4651. What we said, pre-ERISA, in Hoefel v. Atlas Tack Corp., 581 F.2d 1, 7 (1st Cir.1978), seems to be as valid today: “Where the employer establishes the terms of a pension plan, those terms should be construed in favor of the employee.”
I would affirm the judgment.

. The district court found no basis in the Internal Revenue Code, regulations, or interpretative rulings for applying partial termination to workers kept on long after the termination date “especially where that date and an attendant accounting or valuation date are established retroactively".

. In January of 1982, Internal Revenue Service replied, stating that "termination of this plan does not adversely affect its qualification for federal tax purposes”.

. Even evidence of this action fails to conform with section 14.2 of the plan which requires that "Any action by the Company pursuant to any of the provisions of this plan shall be evidenced by a copy of a resolution of the Pension Committee of Chromalloy American Corporation, certified by its Secretary or Assistant Secretary.” What is before us, as an exhibit to the stipulation, is a copy of a resolution signed by the three members of the Pension Committee, but lacking any certification.