Court Opinion

ID: 2149189
Source: CourtListenerOpinion
Date Created: 2013-10-30 08:28:00.576487+00
Date Added: 2024-06-11T18:25:23.617129
License: Public Domain

444 F.Supp. 1306 (1978)
Patsy CAPOCCI and Edith M. Capocci, Plaintiffs,
v.
GENERAL MOTORS CORPORATION, Individually and as trustee under the General Motors Hourly Rated Pension Plan, and General Motors Hourly Rated Pension Plan, Defendants.
Civ. No. 76-0419.
United States District Court, D. Hawaii.
February 9, 1978.
*1307 Robert A. Smith, Maciszewski & Smith, Honolulu, Hawaii, for plaintiffs.
Robert S. Katz, Torkildson, Katz, Jossem & Loden, Honolulu, Hawaii, for defendants.

DECISION ON CROSS MOTIONS FOR SUMMARY JUDGMENT
SAMUEL P. KING, Chief Judge.
After thirty-six years of employment with General Motors Corporation (GM), Patsy Capocci retired on August 1, 1972, at the age of fifty-eight years and nine months. He moved to Hawaii with his wife, Edith, and, in January 1973, obtained employment as a baggage inspector at the Kauai airport. Contrary to his union negotiated pension plan, Mr. Capocci earned more than the social security maxima for 1973, 1974, and 1975.
The GM plan provides that (1) any earnings exceeding the social security maxima for years during which the pensioner receives an early retirement supplement trigger a penalty equaling twice the excess, (2) early retirement supplements ordinarily due from the date of the excess are suspended until the penalty is recovered, (3) the penalty is not itself recovered against normal retirement benefits, and (4) if the pension plan discovers the excess earnings sometime after the excess arose, the interim supplemental payments are recaptured in undoubled amount against any available pension benefits, unless the pensioner repays the excess in lump sum.
Mr. Capocci's excess earnings for the three years were $1840.12, $4424.00, and $6593.00 respectively, totaling $12,857.12. The penalty was therefore $25,714.24 and supplements totaling $14,146.06 were to be suspended from August 1973 (the month after Capocci first exceeded $2100 in 1973) through November 1978 (the month after he turns sixty-five). Since GM learned of the excesses only after $9173.97 in interim payments were made, it began recapturing this overpayment in September 1976. There being no supplemental benefits available for set offs  they had been suspended  GM recaptured against Capocci's basic benefits. Because of this set off, Capocci will receive no benefits until July 1979, eight months after he obtains normal retirement age of sixty-five. The appendix summarizes the accounting.
Patsy and Edith Capocci brought this action, claiming that (1) the suspension and recapture violates nonforfeiture provisions of the Employee Retirement Income Security Act of 1974 (ERISA), (2) the union negotiated contract providing for the pension plan is adhesive and unconscionable, (3) defendants are prevented from recapturing the overpayments by the doctrine of estoppel in pais, and (4) the suspension of twice the excess earnings is part of unenforceable liquidated damages. Plaintiffs have moved for partial summary judgment on their first claim. Defendants have filed a cross motion for summary judgment on all claims.
This opinion deals exclusively with the first claim. The court is of the opinion that Rehmar v. Smith, 555 F.2d 1362, 1368 (9th Cir. 1976), disposes with the question of adhesion and unconscionability. Furthermore, genuine issues of material fact remain as to estoppel and liquidated damages. For these reasons, defendants' motion is granted on the second claim and denied on the third and fourth.
Plaintiff Patsy Capocci's early retirement supplement is not governed by ERISA § 203(a), 29 U.S.C. § 1053(a) (Supp. V 1975). Congress did not intend for early *1308 retirement supplements to be unforfeitable, Conf.Rep. No. 1280, 93d Cong., 2d Sess. 273, reprinted in [1974] U.S.Code Cong. & Admin.News pp. 5038, 5055, and ERISA is structured to implement that intent. The Employee Retirement Income Security Act of 1974 provides in section 203(a) that except in a few circumstances inapplicable here, "an employee's right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age . . .." 29 U.S.C. § 1053(a) (Supp. V 1975). Normal retirement age is defined as the earlier of the following: (1) normal retirement age as defined in the plan and (2) the later of (a) age sixty-five or (b) the tenth anniversary of the time a plan participant commenced participation in the plan. ERISA § 3(24); 29 U.S.C. § 1002(24) (Supp. V 1975). Plaintiffs argue that because the early retirement supplements constitute accrued benefits payable after Patsy Capocci had been a plan participant for over ten years, the supplements were nonforfeitable. This is not the case.
General Motors' plan defines normal retirement age as age sixty-five. Under ERISA's definition of "normal retirement age," once a plan sets the age of sixty-five for normal retirement, normal retirement age can never be before the participant turns sixty-five. Consequently, only Capocci's benefits that are payable from December 1978 are nonforfeitable. Even so, to recapture against these benefits is merely to offset overpayments made from August 1973 through November 1978. Although this kind of recapture, beyond normal retirement age, might in some cases be due to overpayments made after the suspension has effected the recovery of undoubled excesses, this would be a matter better left to a common law claim of unenforceable liquidated damages.
As to the first claim, plaintiffs' motion is denied, and defendants', granted.

APPENDIX

      DATE         PENSION        OVERPAID        RECAPTURE     PENALTY    EVENT
      ====         =======        ========        =========     =======    =====
               BASIC     EARLY
      1972
      AUG      198.41   283.83      0.00             0.00         0.00     -Pension begins
      SEPT     198.41   283.83      0.00             0.00         0.00
      OCT      198.41   283.83      0.00             0.00         0.00
      NOV      198.41   283.83      0.00             0.00         0.00
      DEC      198.41   283.83      0.00             0.00         0.00
      1973
      JAN      198.41   283.83      0.00             0.00         0.00     -Kauai employment
                                                                            begins
      FEB      198.41   283.83      0.00             0.00         0.00
      MAR      198.41   283.83      0.00             0.00         0.00
      APR      198.41   283.83      0.00             0.00         0.00
      MAY      198.41   283.83      0.00             0.00         0.00
      JNE      198.41   283.83      0.00             0.00         0.00
      JLY      198.41   283.83*     0.00             0.00         0.00     -Earnings exceed
                                                                            $2100 [$3940.12]

*1309
      DATE         PENSION        OVERPAID        RECAPTURE     PENALTY    EVENT
      ====         =======        ========        =========     =======    =====
               BASIC     EARLY
      1973
      AUG      198.41   283.83*   283.83             0.00         0.00
      SEPT     198.41   283.83*   283.83             0.00         0.00
      OCT      218.25   263.99*   263.99             0.00         0.00
      NOV      218.25   263.99*   263.99             0.00         0.00
      DEC      218.25   263.99*   263.99             0.00         0.00
      1974
      JAN      218.25   263.99*   263.99             0.00         0.00
      FEB      218.25   263.99*   263.99             0.00         0.00
      MAR      218.25   263.99*   263.99             0.00         0.00
      APR      218.25   263.99*   263.99             0.00         0.00
      MAY      218.25   263.99*   263.99             0.00         0.00
      [1974]
      JNE      218.25   263.99*   263.99             0.00         0.00
      JLY      218.25   263.99*   263.99             0.00         0.00     -Earnings exceed
                                                                            $2400 [$6824.00]
      AUG      218.25   263.99*   263.99             0.00         0.00
      SEPT     218.25   263.99*   208.69+55.30       0.00         0.00     -1974 overpayments
                                                                            begin with $55.30
      OCT      221.85   260.39*   260.39             0.00         0.00
      NOV      221.85   260.39*   260.39             0.00         0.00
      DEC      221.85   260.39*   260.39             0.00         0.00
      1975
      JAN      221.85   260.39*   260.39             0.00         0.00
      FEB      221.85   260.39*   260.39             0.00         0.00
      MAR      221.85   260.39*   260.39             0.00         0.00
      APR      221.85   260.39*   260.39             0.00         0.00
      MAY      221.85   260.39*   260.39             0.00         0.00
      JNE      221.85   260.39*   260.39             0.00         0.00

*1310
      DATE         PENSION        OVERPAID        RECAPTURE     PENALTY    EVENT
      ====         =======        ========        =========     =======    =====
               BASIC     EARLY
      1975
      JLY      221.85   260.39*   260.39             0.00        39.32     -Overpayments of
                                                                            penalties '73 & '74
      AUG      221.85   260.39*   260.39             0.00       260.39
      SEPT     221.85   260.39*   260.39             0.00       260.39
      OCT      230.99   251.25*   251.25             0.00       251.25
      NOV      230.99   251.25*   251.25             0.00       251.25
      DEC      230.99   201.25*   201.25             0.00       201.25     -Patsy turns 62
      1976
      JAN      230.99   201.25*   201.25             0.00       201.25
      FEB      230.99   201.25*   201.25             0.00       201.25
      MAR      230.99   201.25*   201.25             0.00       201.25
      APR      230.99   201.25*   201.25             0.00       201.25
      MAY      230.99   201.25*   201.25             0.00       201.25
      JNE      230.99   201.25*   201.25             0.00       201.25
      JLY      230.99   201.25*   201.25             0.00       201.25
      AUG      230.99   201.25*   201.25             0.00       201.25
      [1976]
      SEPT     230.99   201.25*     0.00           230.99       201.25     -Recapture begins
      OCT      244.03   188.71*     0.00           244.03       188.71
      NOV      244.03   188.71*     0.00           244.03       188.71
      DEC      244.03   188.71*     0.00           244.03       188.71
      1977
      JAN      244.03   188.71*     0.00           244.03       188.71
      FEB      244.03   188.71*     0.00           244.03       188.71
      MAR      244.03   188.71*     0.00           244.03       188.71
      APR      244.03   188.71*     0.00           244.03       188.71
      MAY      244.03   188.71*     0.00           244.03       188.71
      JNE      244.03   188.71*     0.00           244.03       188.71
      JLY      244.03   188.71*     0.00           244.03       188.71

*1311
      DATE         PENSION        OVERPAID        RECAPTURE     PENALTY    EVENT
      ====         =======        ========        =========     =======    =====
               BASIC     EARLY
      1977
      AUG      244.03   188.71*     0.00           244.03       188.71     -Penalty for 1975
                                                                            withheld from this pt.
      SEPT     244.03   188.71*     0.00           244.03       188.71
      OCT      250.55   181.69*     0.00           250.55       181.69
      NOV      250.55   181.69*     0.00           250.55       181.69
      DEC      250.55   181.69*     0.00           250.55       181.69
      1978
      JAN      250.55   181.69*     0.00           250.55       181.69
      FEB      250.55   181.69*     0.00           250.55       181.69
      MAR      250.55   181.69*     0.00           250.55       181.69
      APR      250.55   181.69*     0.00           250.55       181.69
      MAY      250.55   181.69*     0.00           250.55       181.69
      JNE      250.55   181.69*     0.00           250.55       181.69
      JLY      250.55   181.69*     0.00           250.55       181.69
      AUG      250.55   181.69*     0.00           250.55       181.69
      SEPT     250.55   181.69*     0.00           250.55       181.69
      OCT      266.22   166.02*     0.00           266.22       166.02
      NOV      266.22   166.02*     0.00           266.22       166.02     -Last disqualified
                                                                            supplement
      DEC      349.69     0.00      0.00           349.69         0.00     -Patsy turns 65
      1979
      JAN      349.69     0.00      0.00           349.69         0.00
      FEB      349.69     0.00      0.00           349.69         0.00
      MAR      349.69     0.00      0.00           349.69         0.00
      APR      349.69     0.00      0.00           349.69         0.00
      MAY      349.69     0.00      0.00           349.69         0.00
      JNE      349.69     0.00      0.00           349.69         0.00
      JLY      349.69     0.00      0.00            27.75         0.00     -Recapture ends
      AUG      349.69     0.00      0.00             0.00         0.00
      SEPT     349.69     0.00      0.00             0.00         0.00

*1312
      DATE         PENSION        OVERPAID        RECAPTURE     PENALTY    EVENT
      ====         =======        ========        =========     =======    =====
               BASIC     EARLY
      1979
      OCT      349.69     0.00      0.00             0.00         0.00
      NOV      349.69     0.00      0.00             0.00         0.00
      DEC      349.69     0.00      0.00             0.00         0.00
EXPLANATION:
1. "*" indicates early retirement benefits suspended to
   recapture excess earnings in 1973, 1974, and 1975.
2. Under PENALTY, the amounts are those suspended to effect
   the penalty. The column contains zeros until July 1975.
   By July the pension plan has recovered all of the undoubled
   excess for 1973 and 1974. In August 1977, the pension plan
   begins that part of the suspension of benefits to effect
   the penalty for excess earnings in 1975.