951 F.2d 806 (7th Cir. 1992), 90-3100, Senn v. United Dominion Industries, Inc.

Docket Nº:90-3100.
Citation:951 F.2d 806
Party Name:Norman SENN, Clemens Kien, Paul Gilmore, et al., Plaintiffs-Appellees, v. UNITED DOMINION INDUSTRIES, INCORPORATED, formerly known as AMCA International Corporation, PST, Incorporated and Pressed Steel Tank Company, Incorporated, Defendants-Appellants.
Case Date:January 08, 1992
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 806

951 F.2d 806 (7th Cir. 1992)

Norman SENN, Clemens Kien, Paul Gilmore, et al., Plaintiffs-Appellees,

v.

UNITED DOMINION INDUSTRIES, INCORPORATED, formerly known as

AMCA International Corporation, PST, Incorporated

and Pressed Steel Tank Company,

Incorporated, Defendants-Appellants.

No. 90-3100.

United States Court of Appeals, Seventh Circuit

January 8, 1992

Argued April 10, 1991.

Page 807

Miriam R. Katzman, Zubrensky, Padden, Graf & Maloney, Milwaukee, Wis., William T. Payne (argued), Schwartz, Steinsapir, Dohrmann & Sommers, Los Angeles, Cal., George Graf, Gillick, Murphy, Wicht & Prachthauser, Brookfield, Wis., for plaintiffs-appellees.

Kirk D. Messmer, Allan Gunn, Jay G. Swardenski (argued), Matkov, Salzman, Madoff & Gunn, Chicago, Ill., for defendants-appellants.

Before BAUER, Chief Judge, COFFEY, Circuit Judge, and WILL, Senior District Judge. [*]

COFFEY, Circuit Judge.

United Dominion Industries, Inc., its subsidiary PST, Inc. ("PST"), and Pressed Steel Tank Co., Inc. ("New Pressed Steel"), the corporation which purchased the assets of PST in January 1987, appeal from the district court's permanent injunction of September 10, 1990. The injunction required the defendants to furnish lifetime health and life insurance benefits to retired PST hourly employees who worked for PST after November 1975, as well as their spouses and eligible dependents. The district court's injunction ordered that the defendants pay the full premium cost for coverage, except for the cost difference between conventional health insurance coverage and HMO coverage for persons who retired after August 1986. The order accompanying the injunction remanded the suit to the magistrate for determination of past damages that retired employees incurred as a result of the defendants' refusal to provide the benefits. We reverse.

I. FACTUAL BACKGROUND

This case concerns the obligations of the defendants to provide health and life insurance coverage for retirees of PST, Inc.

Page 808

under a series of Collective Bargaining Agreements (CBAs) entered into between PST and the United Steelworkers during the period from August 1, 1975 to July 31, 1988. Each one of these CBAs contained a "scope of agreement" provision which read:

"This Agreement and the supplemental letter agreements executed concurrently herewith constitute the sole and entire Agreement between the parties and supersedes all prior Agreements, oral or written, and expresses all of the obligations of or restrictions imposed on the respective parties during its term. Such Agreement can only be amended by a signed agreement executed by the parties. Such agreement shall be published and made available to employees."

The first Collective Bargaining Agreement between PST and the United Steelworkers relevant to this case covered the period from August 1, 1975 to July 31, 1978. Section 24.1 of that agreement read, in relevant part:

"24.1 Insurance

a. The Company shall select the insurance carrier(s) to provide the benefits provided in the Insurance Plans and agrees to continue the plans as described in the Insurance Booklet dated June 12, 1973 entitled 'Insurance Plan for Employees and Their Dependents Covering Hourly Employees--Life Insurance, Accident and Sickness, Hospital Surgical Expense--Major Medical Expense' and as revised.

b. The Company will continue for retired employees, the WPS Medicare Supplemental Plan premium contribution of $3.90 per month and $4.00 Medicare 'B' refund.

* * * * * *

d. The Company and the Union Insurance Committee will meet to revise the Insurance Booklet to incorporate changes either by issuing a new booklet or by issuing supplemental sheets, whichever appears more appropriate."

Prior to revision, the 1973 Insurance Booklet referred to in the CBAs contained the following language relevant to retiree insurance under the general heading of "Termination of Coverage":

"Termination of Employment

If not previously terminated, all coverage terminates at the end of the month in which employment terminates and seniority is lost (see 'Retirement' and 'Conversion' below).

* * * * * *

Retirement

On retirement under the Normal, Disability, or Early Retirement provisions of the Pressed Steel Tank Hourly Pension Plan, at the end of the calendar month in which employment terminates, Accident and Sickness coverage terminates and Term Life Insurance coverage reduces to $1,000 (except that if the employee is eligible for a Disability Retirement Benefit his Term Life Insurance coverage will be continued at its present level (usually $7,500) until the end of the calendar month in which he attains age 65, at which time the coverage reduces to $1,000[ ) ]. Special Hospital-Surgical Expense coverage is available to the retired employee or the retired employee and his dependents if he makes the required quarterly contributions in advance for the coverage desired."

The booklet also contained the following provision under the topic of "Additional Information":

"Retired Employees

Upon retirement, participating employees should contact the Personnel Office to transfer directly into the pension group plan with no lapse of coverage. This change must be made within 30 days of the date of retirement."

Thus, the 1975-78 agreement provided for continuing health and welfare benefits for retirees at company expense. The joint union-company insurance committee published a revised Insurance Booklet in December 1976 that contained provisions materially identical to those quoted from the 1973 booklet. The revised booklet did, however, add a schedule of the company's contributions toward retiree health insurance. Further, in November 1977 PST filed a summary plan description with the

Page 809

Department of Labor (as required under ERISA) that contained the following language regarding retiree benefits:

"As an eligible retiree of the Pressed Steel Tank Co., Inc., the benefits listed below are available to you under this plan, with coverage effective upon your retirement date. Benefits include Health, Life and, for Early and Disability retirees, Dental insurance. Coverage will be effective upon your retirement date provided you agree to make any required contributions."

The Summary Plan Description also contained a "Loss of Benefits" section that provided:

"You must continue to be a member of the class to which the plan pertains and continue to make any of the contributions agreed to when you enrolled.

Failure to meet any or all of these requirements may result in partial or total loss of your benefits. The insurance booklet describes conditions which could result in a termination of benefits."

Neither the 1975-78 CBA nor the 1976 Insurance Booklet required contributions from retirees.

The parties entered into a 1978-81 Collective Bargaining Agreements that contained language identical to that found in Sections 24.1a. and 24.1d. of the 1975-78 agreement with the exception that the Insurance Booklet referred to was the 1976 edition. The Insurance Booklet issued in 1979 contained language similar to that of the 1976 Booklet with the exception that the death benefit on term life insurance was increased for retirees and changes were made in the company's contributions for retiree insurance. The bargaining agreement adopted for 1981-84 included the following language setting forth more explicitly the company policy of paying the cost of retiree insurance:

"24.1 Insurance

* * * * * *

e. Surgical-Medical

* * * * * *

  1. Effective 8-01-82 the company will pay the full cost for retiree medical insurance. (No dental, no drug). Coverage will include 'carve out' provision and full Medicare-B-refund for retiree [sic] over age 65."

    In April of 1982 the joint union-company insurance committee issued a revised Insurance Booklet that increased retiree life insurance coverage to $2,000 and provided that, effective August 1, 1982, all retirees, regardless of retirement date, would have their full insurance premium paid by PST.

    AMCA International Corporation (the name under which United Dominion Industries, Inc. operated at all times relevant to this suit) acquired PST as a subsidiary in 1982. Thus, the negotiations for the 1984-86 Collective Bargaining Agreements were the first bargaining sessions in which United Dominion participated, and the resultant agreement included a significant revamping of employee health benefits. The new provisions of the CBA relevant to retiree medical benefits read as follows:

    "24.1 a. The Company reserves the right to select or change the insurance carrier(s) or to self fund the negotiated group benefits.

    b. The existing group medical, life, dental and accident and sickness coverages in effect on July 31, 1984 will be continued until the new group benefit plans become effective on October 1, 1984.

    c. The existing group medical plan will be eliminated. In its place the company Comprehensive Health Plan will be installed. Employees will have the option of selecting the Company's Comprehensive Health Plan or one of the following Health Maintenance Organizations (HMO's):

  2. Compcare

  3. Family Health Plan

  4. Maxicare

  5. Samaritan Health Plan

    ... The company will pay the full premium contribution for either option.

    * * * * * *

    g. Each employee shall be furnished a copy of the Group benefits booklet which shall contain the benefits negotiated."

    Page 810

    The Group benefits booklet issued in April 1985 1 set forth the following language regarding retiree health insurance:

    "The class of Employees also includes eligible Retired Employees (including eligible dependents) who are retired in accordance with the retirement plan of the Company but limited in benefit coverage as follows:

  6. Accident and sickness [disability] benefits are only provided to...

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71 practice notes
  • 61 F.3d 560 (7th Cir. 1995), 94-2292, Murphy v. Keystone Steel & Wire Co., a Div. of Keystone Consol. Industries, Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Seventh Circuit
    • July 28, 1995
    ...duration is silent on the issue of vesting, we presume that benefits were not intended to vest. Senn v. United Dominion Industries, Inc., 951 F.2d 806, 816 (7th Cir.1992); Bidlack, 993 F.2d at 607. But that presumption can be rebutted by extrinsic evidence. Id.; see also AM International, 4......
  • 803 F.Supp. 1367 (C.D.Ill. 1992), 92-2166, Independent Lift Truck Builders Union v. Hyster Co.
    • United States
    • Federal Cases United States District Courts 7th Circuit Central District of Illinois
    • July 31, 1992
    ...to entertain disputes between employers and retirees. [4] The decision of the Seventh Circuit in Senn v. United Dominion Industries, Inc., 951 F.2d 806 (7th Cir. 1992) is also inapposite. That case had nothing to do with arbitration. In Senn, the collective bargaining agreement between the ......
  • Quesenberry v. Volvo Group North America, Inc., 030510 VAWDC, 1:09cv00022
    • United States
    • Federal Cases United States District Courts 4th Circuit Western District of Virginia
    • March 5, 2010
    ...Tecumseh Prods. Co., 123 F.3d 877, 882-83 (6th Cir. 1997) (affirming denial of jury trial); but see Senn v. United Dominion Indus., Inc., 951 F.2d 806, 813-14 (7th Cir. 1992) (granting jury trial because monetary relief sought constituted legal relief even though injunctive relief sought co......
  • 318 F.Supp.2d 752 (W.D.Wis. 2004), 03-C-415, Northern Crossarm Co., Inc. v. Chemical Specialties, Inc.
    • United States
    • Federal Cases United States District Courts 7th Circuit Western District of Wisconsin
    • May 18, 2004
    ...parties' intent from extrinsic evidence where contract was silent on relevant issue); Senn v. United Dominion Industries, Inc., 951 F.2d 806, 816 (7th Cir. Page 760 (meaning of silence determined in light of explicit language). See also Restatement (Second) of Contracts § 204 cmt. c (althou......
  • Free signup to view additional results
70 cases
  • 61 F.3d 560 (7th Cir. 1995), 94-2292, Murphy v. Keystone Steel & Wire Co., a Div. of Keystone Consol. Industries, Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Seventh Circuit
    • July 28, 1995
    ...duration is silent on the issue of vesting, we presume that benefits were not intended to vest. Senn v. United Dominion Industries, Inc., 951 F.2d 806, 816 (7th Cir.1992); Bidlack, 993 F.2d at 607. But that presumption can be rebutted by extrinsic evidence. Id.; see also AM International, 4......
  • 803 F.Supp. 1367 (C.D.Ill. 1992), 92-2166, Independent Lift Truck Builders Union v. Hyster Co.
    • United States
    • Federal Cases United States District Courts 7th Circuit Central District of Illinois
    • July 31, 1992
    ...to entertain disputes between employers and retirees. [4] The decision of the Seventh Circuit in Senn v. United Dominion Industries, Inc., 951 F.2d 806 (7th Cir. 1992) is also inapposite. That case had nothing to do with arbitration. In Senn, the collective bargaining agreement between the ......
  • Quesenberry v. Volvo Group North America, Inc., 030510 VAWDC, 1:09cv00022
    • United States
    • Federal Cases United States District Courts 4th Circuit Western District of Virginia
    • March 5, 2010
    ...Tecumseh Prods. Co., 123 F.3d 877, 882-83 (6th Cir. 1997) (affirming denial of jury trial); but see Senn v. United Dominion Indus., Inc., 951 F.2d 806, 813-14 (7th Cir. 1992) (granting jury trial because monetary relief sought constituted legal relief even though injunctive relief sought co......
  • 318 F.Supp.2d 752 (W.D.Wis. 2004), 03-C-415, Northern Crossarm Co., Inc. v. Chemical Specialties, Inc.
    • United States
    • Federal Cases United States District Courts 7th Circuit Western District of Wisconsin
    • May 18, 2004
    ...parties' intent from extrinsic evidence where contract was silent on relevant issue); Senn v. United Dominion Industries, Inc., 951 F.2d 806, 816 (7th Cir. Page 760 (meaning of silence determined in light of explicit language). See also Restatement (Second) of Contracts § 204 cmt. c (althou......
  • Free signup to view additional results
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