Court Opinion

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Date Created: 2015-10-13 21:54:54.541729+00
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Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

3-25-2003

McCoy v. Bd Trustees 222
Precedential or Non-Precedential: Non-Precedential

Docket 02-1854

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                                                           NOT PRECEDENTIAL

                   UNITED STATES COURT OF APPEALS
                        FOR THE THIRD CIRCUIT
                             ___________

                           Nos. 02-1854 and 02-1987
                                 ___________

                              WILLIE J. MCCOY,
                                         Appellant in No. 02-1854/ Cross Appellee
                                             in No. 02-1987
                                        v.

BOARD OF TRUSTEES OF THE LABORERS’ INTERNATIONAL UNION, LOCAL NO.
  222 PENSION PLAN; LABORERS’ INTERNATIONAL UNION, LOCAL NO. 222
PENSION PLAN; LABORERS’ INTERNATIONAL UNION LOCAL NO. 222; EDWARD
HARRIS; OLIVER G. GLASS; X, Y, Z CORPORATIONS (1-10), INDIVIDUALS; A, B, C
      (1-10), (ALL FICTITIOUS NAMES WHO ARE PLAN SPONSORS and/OR
  ADMINISTRATORS OR OTHER FIDUCIARIES, WHO SHOULD BE IDENTIFIED
   THROUGH DISCOVERY); NEW JERSEY BUILDING LABORERS’ STATEWIDE
                               PENSION FUND,
                                          Appellees in No. 02-1854/ Cross
                                          Appellants in No. 02-1987
                                 ___________

                  On Appeal from the United States District Court
                            for the District of New Jersey
                                 (No. 00-cv-01481)
                District Judge: The Honorable Stephen M. Orlofsky
                                    ___________

                Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                               January 17, 2003
             Before: ROTH, FUENTES and ALDISERT, Circuit Judges
                        (Opinion Filed: March 25, 2003)
                                    _______________________

                                    OPINION OF THE COURT
                                   ________________________

FUENTES, Circuit Judge:

       Plaintiff Willie J. McCoy appeals the District Court’s order granting in part and denying

in part the parties’ cross-motions for summary judgment and the District Court’s order denying

his motion for reconsideration.        Defendants, the Board of Trustees of the Laborers’

International Union, Local No. 222 Pension Plan (the “Plan”) and various persons and entities

associated with the Plan, cross appeal the same orders, both of which concern               McCoy’s

entitlement to disability retirement benefits under the Plan.      Because we discern no error in

the District Court’s resolution of the parties’ cross-motions for summary judgment, we affirm.

                                 I. Facts and Procedural Background

       The factual allegations underlying this case are well known to the parties, and therefore,

they are not detailed here, except to the extent that they directly bear upon the analysis.        On

March 29, 2000, appellant Willie J. McCoy, a participant and beneficiary of the Plan, 1 initiated

the action which is the subject of these cross-appeals by filing a pro se Complaint against the

Plan’s Board of Trustees in District Court. In his Complaint, McCoy alleged that the defendant

       1
          The Plan and its successor by merger, defendant New Jersey Building Laborers Statewide
Pension Fund (which was named in plaintiff’s Fourth Amended Complaint, filed after the parties filed
their cross-motions for summary judgment), are employee welfare benefit plans within the meaning of
ERISA, 29 U.S.C. § 1002(1).

                                                 -2-
unlawfully refused to provide disability retirement benefits due to him under the Plan after he

suffered a back injury on January 5, 1995 which left him disabled and unable to engage in

gainful employment.    McCoy subsequently retained counsel and, with the permission of the

Court, filed amended complaints in which he named additional defendants and asserted

numerous other theories of recovery.

       Specifically, in his Fourth Amended Complaint, McCoy alleged that he had been

employed for at least twenty years as a laborer in the construction industry, working under a

collective bargaining between defendant Laborers’ International Union, Local No. 222 and

various employers, which required his employers to make health and welfare contributions to

the Plan on his behalf.   McCoy alleged that, on January 5, 1995, he was injured during the

course of his employment as a construction laborer with Enviro Tech, Inc. of Woodbury, N.J.

and that, since that time, he has been totally and permanently disabled, and unable to engage in

any gainful employment.    He further alleged that, shortly after the accident, he contacted Ms.

Freddie McMillan, the Plan’s Administrator to request information on how to apply for

disability retirement benefits under the Plan and was advised that he had to be out of work for

at least six months in order to be eligible to apply for disability benefits under the Plan.

       Plaintiff alleged that, based on Ms. McMillan’s advice, he waited six months, then

returned with the information Ms. McMillan told him he would need to present in order to

complete his application for disability retirement benefits.   Defendants Edward Harris and

Oliver Glass, who were then members of the Plan’s Board of Trustees, allegedly refused to

accept McCoy’s application and advised him that he could not apply for disability retirement

                                              -3-
benefits under the Plan until his application for social security benefits had been approved and

that the Plan would provide him with benefits for the same period as had been approved by

Social Security.

        On November 27, 1998, the Office of Hearings and Appeals of the Social Security

Administration determined that plaintiff suffered from a disability within the meaning of the

Social Security Act, as a result of his job-related injury, and that the period of his disability

began on January 9, 1995.       On December 28, 1998, Social Security awarded plaintiff monthly

disability benefits beginning in July of 1995.       The Notice of Award explained that the first

month of benefits was July 1995 because plaintiff had to be disabled for 5 full consecutive

calendar months before becoming entitled to benefits.

        On December 18, 1998, McCoy submitted an application for disability benefits to the

Plan, together with information and materials necessary to process his application.       McCoy’s

application was approved and he began receiving benefits as of January 1, 1999.           However,

defendants refused to provide him with any benefits for the period prior to January 1, 1999 and

allegedly failed to pay any benefits to his wife, despite repeated demands to do so.

        The record on appeal shows that McCoy appealed the Board of Trustee’s refusal to

provide him with retroactive disability benefits.        According to the minutes of the meeting of

the Trustees, the appeal was considered during meetings held on May 12, 1999, November 18,

1999, and February 2, 2000, and was repeatedly and unanimously denied.

        Based on the foregoing, plaintiff’s Fourth Amended Complaint sought, inter alia: (1)

unpaid benefits due under the terms of the Plan, declaratory relief clarifying plaintiff’s right

                                                   -4-
to future benefits under the Plan, together with attorneys’ fees, costs, and interest; (2)

compensatory and punitive damages for material misrepresentations, allegedly constituting a

breach of the fiduciary duties of Plan trustees Glass and Harris, concerning the process for

applying for benefits; (3) an order holding the Plan Administrator personally liable in an

amount up to $100.00 a day for failing to provide him with a notice explaining the basis for the

Board of Trustees’ decision to deny his appeal and his options should he wish to appeal further;

and (4) an injunction compelling defendants to provide all Plan participants and beneficiaries

with a revised Summary Plan Description reflecting its amendment.

       With respect to the benefits due under the Plan, plaintiff alleged that defendants

wrongfully refused to provide him with retroactive disability retirement benefits dating back

to the first day on which he was eligible to receive a disability benefit under the Social Security

Act. Plaintiff also alleged that his retirement benefits should have been calculated at a monthly

rate of $107.00 or $120.00, based on amendments to the Plan effective January 1, 1998 and

January 1, 1999, respectively, rather than the $80.00 monthly rate used by the defendants,

which was based on an amendment to the Plan effective January 1, 1997.

       The parties filed cross-motions for summary judgment on December 14, 2001.              The

District Court granted in part and denied in part each of the cross-motions. The Court rejected

defendants’ assertion that McCoy had failed to exhaust his administrative remedies under the

Plan on the basis that defendants waived their right to contest plaintiff’s failure to exhaust and

that defendants’ delay in asserting this affirmative defense prejudiced plaintiff.     The Court

granted summary judgment in plaintiff’s favor on the issue of his entitlement to disability

                                                 -5-
retirement benefits dating back to when he became eligible to receive a disability benefit under

the Social Security Act, i.e., July 1995.

        Regarding the amount of retroactive benefits owed, however, the District Court held

that plaintiff’s benefits should be calculated according to the terms of the Plan applicable to

participants who became eligible for benefits on or after January 1, 1994 but before December

31, 1995. Accordingly, the District Court awarded plaintiff $60 per year of credit earned prior

to January 1, 1986 and $75 per year of credit earned on or after January 1, 1996. See McCoy

v. Board of Trustees of the Laborers’ International Union, Local No. 222 Pension Plan, et al.,

No. 00-1481 (D. N.J. Feb. 26, 2002) (“Dist. Ct. Op.”), app. at 26 (citing Amendment No. 3 to

Plan). Notably, this amount was less than the $80 a month which the defendants had initially

awarded plaintiff based on their reading of the Plan. Additionally, the Court rejected plaintiff’s

assertion that the amount of benefits he was owed from the effective date of his pension going

forward should have been set at $120 per month per year of credit. However, because neither

party had asked the Court to reduce McCoy’s future benefits from the $80 per month per credit

year computed by the Plan Administrator, the Court did not reduce that figure. See id. at 28

n.8.

        The District Court also granted defendants’ motion for summary judgment in part by

dismissing plaintiff’s claims of breach of fiduciary duty against Glass and Harris, the individual

trustees named in the Complaint. The Court reasoned that any recovery for breach of fiduciary

duty would be duplicative of the benefits which the Court was awarding plaintiff for retroactive

benefits.    Finally, the District Court granted plaintiff the injunction he sought, ordering

                                               -6-
defendants to furnish him with a copy of an official Summary Plan Description of the Plan

succeeding the Plan in effect during his employment within 10 days of the next regularly

scheduled meeting of the trustees of that Plan.

        On March 7, 2002, plaintiff filed a motion for reconsideration.      The Court denied the

motion. McCoy timely appealed the District Court’s orders on the parties’ cross-motions for

summary judgment and on his motion for reconsideration.          Defendants timely cross- appealed.

                                   II. Jurisdiction and Standard of Review

        The District Court exercised jurisdiction over this matter under 29 U.S.C. § 1132(e)

and 28 U.S.C. § 1331. We have appellate jurisdiction under 28 U.S.C. § 1291.

        The standard of review applicable to an order granting summary judgment is plenary.

See Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002). We apply the same test employed

by a District Court under Federal Rule of Civil Procedure 56(c).             See Kelley v. TYK

Refractories Co., 860 F.2d 1188, 1192 (3d Cir. 1988). Accordingly, the District Court’s grant

of summary judgment was proper only if it appears that “there is no genuine issue as to any

material fact and that [each of] the moving part[ies] is entitled to a judgment as a matter of

law.”   Fed. R. Civ. P. 56(c).       In evaluating the evidence, we are required “to view [the]

inferences to be drawn from the underlying facts in the light most favorable to the party

opposing the motion.”       Bartnicki v. Vopper, 200 F.3d 109, 114 (3d Cir. 1999) (citation

omitted).

        “[T]he standard of review for a denial of a motion for reconsideration varies with the

nature of the underlying judicial decision.”      Federal Kemper Ins. Co. v. Rauscher, 807 F.2d

                                                  -7-
345, 348 (3d Cir. 1986).         Because this court is addressing the District Court’s rulings on

motions for summary judgment, this Court has plenary review. See id. at 349.

                                        III. Discussion

        McCoy argues on appeal that the District Court erred in calculating the amount of

additional benefits which he is entitled to receive under the Plan. He asserts that he is entitled

to monthly disability retirement benefits at the rate of $120 per year based on an amendment

to the Plan increasing the pension rate for disability retirees eligible for benefits on or after

January 1, 1999 to $120 per year of credited service. Alternatively, McCoy argues that he is

entitled to at least the $80 monthly benefit originally provided to him based on an amendment

to the Plan effective January 1, 1998, which increased the monthly benefit for participants

eligible on or after January 1, 1997 through December 30, 1998 to $80 multiplied by total

years of credit.    Essentially, McCoy argues that the District Court erred by determining that

he was entitled to benefits at the lower rate in effect when he first became disabled because

the amount of benefits to which he is entitled depends on when he became eligible to receive

benefits and he did not become eligible until January 1, 1999, the effective date of his pension,

or, at the earliest, in 1998, when he was awarded disability benefits under the Social Security

Act.2

        2
         McCoy also asserts that the District Court erred by dismissing the counts of his Complaint
seeking damages for defendants’ material misrepresentations of the Plan’s provisions because genuine
issues of material fact existed due to defendants denial that they made the alleged misrepresentations.
He concedes that the claims are moot based on the case’s current procedural posture, but seeks the
opportunity to try these claims should the Court grant defendants’ cross-appeal.

                                                   -8-
       Defendants argue in their cross-appeal that they properly applied the terms of the Plan

which were in effect when plaintiff was injured, at a benefit rate in effect when the employer

contributions to fund plaintiff’s benefits ceased.     They assert that   plaintiff’s benefit level was

properly set at the rate in effect in 1997, when he left covered employment and ceased being

an active Plan participant.   Additionally, defendants assert that their decision to fix the date

Plaintiff would begin to receive benefits at January 1, 1999 was consistent with the version of

the Plan in effect when plaintiff was injured.       Defendants assert that the District Court erred

in concluding that the benefits which they awarded plaintiff were inconsistent with the          Plan.

       We affirm substantially for the reasons set forth in the District Court’s thorough and

well reasoned opinion.    The District Court expressly recognized that it could not disturb the

Plan Administrator’s interpretation of the Plan unless it was arbitrary and capricious. See Dist.

Ct. Op., app. at 22 (citing Skretvedt v. E.I. DuPont de Nemours & Co., 268 F.3d 167, 173 (3d

Cir. 2001)). The Court correctly noted, however, that it need not defer to an interpretation of

the Plan which contravenes its plain language. See id. (citing Epright v. Entl. Res. Mgmt., Inc.

Health and Welfare Plan, 81 F.3d 335, 342 (3d Cir. 1996)).

       With respect to plaintiff’s eligibility for retroactive disability retirement benefits, the

Court looked to the plain language of Amendment No. 4 to the Plan, effective January 1, 1988,

amending Section 4.3 of the Plan. The Amendment provided, in relevant part, that an applicant

for disability retirement benefits who proved that he had been awarded a disability benefit

under the provisions of the Social Security Act “shall be eligible to receive a Disability

Retirement Benefit which shall begin as of the first day that he is eligible to receive a disability

                                                 -9-
benefit under the Social Security Act.” Dist. Ct. Op., app. 23 (citing Amendment No. 4 to Plan,

app. at 142).     The Court concluded that this provision of the Plan was controlling because it

went into effect on January 1, 1998, some eleven months before plaintiff’s December 18,

1998 application for benefits under the Plan.

        In reaching its conclusion the Court rejected defendants’ assertion that they were

obliged to treat plaintiff’s application as though the 1995 version of the Plan was still in effect

lest he benefit from contributions made to the pension fund on behalf of all actively working

members of his union even though minimal contributions had been made to the Plan in the

years prior to his application based on his own work.        The Court also rejected defendants’

assertion that Section 4.3 of the Plan, which was amended by Amendment No. 4, was

inapplicable to plaintiff because his application was more appropriately considered as one

under section 4.4 of the Plan for a deferred vested retirement benefit. The Court noted that

Section 4.4, by its express terms, applied only to participants who, unlike plaintiff, were not

otherwise entitled to receive a retirement benefit.

        With respect to the amount of retroactive benefits due plaintiff, the Court reasoned that,

because plaintiff became eligible for disability retirement benefits under the Plan dating back

to when he became eligible to receive a disability benefit under the Social Security Act (July

1995), his retroactive benefits should be calculated according to the terms of the Plan

applicable to Plan participants who became “eligible on or after January 1, 1994 through

December 31, 1995.” Dist Ct. Op., app. at 26 (citing Amendment No. 3 to Plan, app. at 140).

The Court therefore awarded plaintiff $60 per year of credit earned prior to January 1, 1986

                                                      -10-
and $75 per year of credit earned on or after January 1, 1986. See id.

        After carefully considering the competing readings of the Plan advanced by the parties

and all of the arguments they present in support of reversing the District Court’s orders, we

discern no error in the District Court’s resolution of the cross-motions for summary

judgment.

                                            IV. Conclusion

        For substantially the reasons set forth in the District Court’s well-reasoned opinion, we

deny the cross-appeals from the District Court’s order granting in part and denying in part the

parties’ cross-motions for summary judgment and the order denying plaintiff’s motion for

reconsideration. We therefore affirm the District Court’s orders.

_____________________________

TO THE CLERK OF THE COURT:

Kindly file the foregoing Opinion.

                                                                By the Court,

                                                                /s/ Judge Julio M. Fuentes

                                                                Circuit Judge

                                                  -11-