Aitken v. IP & GCU Employer Retirement Fund, GCU-EMPLOYER
| Decision Date | 27 September 1979 |
| Docket Number | No. 77-1437,GCU-E,GCU-EMPLOYER,77-1437 |
| Citation | 604 F.2d 1261 |
| Parties | 102 L.R.R.M. (BNA) 2608, 87 Lab.Cas. P 11,589 Leslie D. AITKEN, Plaintiff-Appellant, v. IP &RETIREMENT FUND, the Retirement Fund Committee of the IP&mployer Retirement Fund, Daniel Johnston and James Smock, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Richard P. Donaldson, Donaldson & Kiel, P. S., Seattle, Wash., on brief, for plaintiff-appellant.
Leslie D. Aitken, in pro per.
Appeal from the United States District Court for the Northern District of California.
Before MOORE, * SNEED, and KENNEDY, Circuit Judges.
This action involves a claim by a labor union member for pension benefits and damages resulting from an alleged breach, by a pension fund and its administrators, of contract obligations, fiduciary duties, and other duties implied by the law of torts. The issue is whether the member is eligible to participate in the retirement plan, and if not, whether he can in any event recover damages from any of the defendants. Suit was commenced in state court, and the defendants removed it to the United States District Court for the Northern District of California. After cross motions for summary judgment, the district court granted summary judgment for the defendants on December 2, 1976. This appeal followed.
The defendants below, appellees here, are the International Printing & Graphic Communications Union, the Employer Retirement Fund (Retirement Fund or Fund), the Fund Committee, which is the trustee of the Fund, Daniel Johnston, the Administrator of the Fund, and James Smock, Johnston's Administrative Assistant. The Fund was created in 1955. It was established and has been maintained in accordance with section 302(c)(5) of the Taft-Hartley Act, 29 U.S.C. § 186(c)(5), and Internal Revenue Code § 401(a). There are about 1900 newspaper, commercial printing and paper products employers who are parties to collective bargaining agreements with about 275 local unions. The employers currently contribute to the Fund on behalf of some 47,500 employees. At least 7,900 retired employees are now receiving or have previously received retirement benefits from the Fund.
The plaintiff below, appellant here, is Leslie D. Aitken. Aitken is a printer who has operated two successive businesses, both as sole proprietorships. Aitken operated Art Craft Press in California from 1946 until sometime in 1963. In 1963 plaintiff purchased and began operating Packard for Printing. Both concerns were operated For a short time, but then plaintiff devoted all his attentions to Packard For Printing, which he operated exclusively until his retirement in January 1973. In the early years Aitken had some employees under his supervision from time to time, but from 1968 to 1973 he was the sole printer in his proprietary shop.
Although he owned his own business, Aitken remained a dues paying member of Oakland Printing Pressmen and Assistants' Union Local 125, and later with Western Graphic Art Union Local 14. This entitled him to put the union symbol on his printing products and to fill union printing orders. Art Craft, and later Packard, were parties to various collective bargaining agreements with Local 125 and Local 14.
The bargaining between Art Craft Press and Local 125 produced an agreement by Art Craft Press to contribute to the retirement fund. The retirement fund administrative office received a copy of the collective bargaining agreement, which was signed for Art Craft Press by Aitken as "employer" and showed Art Craft Press as the company. The status of the business as a sole proprietorship was not indicated. Upon receipt of the agreement the fund sent Art Craft Press various materials, including employer report forms, employee enrollment cards, and copies of the full text of the "Retirement Benefit Plan" and a "Trust Agreement" governing operation of the fund.
Aitken enrolled himself in the fund and transmitted a contribution report form. The report listed Aitken as an employee of Art Craft Press, showed the number of shifts he worked, and was accompanied by employer payments checks signed by the plaintiff. Subsequent contribution report forms were filed for some later periods. There are allegations that during the brief period when Aitken had two companies, the Administrative Office of the Fund inquired of Fred Brooks, Secretary-Treasurer of Local 125, whether the two companies had merged; that Brooks knew Aitken was a sole proprietor; and that he wrote a letter to the Fund putting them on notice of this fact. The defendants deny Brooks notified the Fund of Aitken's status.
In August of 1970, apparently following the merger of Local 125 into Local 14, plaintiff signed another pension contributing agreement. Plaintiff signed the documents, filled in the name "Packard For Printing" over the "company" line, wrote "owner" over the "title" line on each form, and checked the "sole proprietor" box on the pension contributing agreement. Plaintiff mailed copies to the Administrative Office of the Fund, although the appellees deny having received the agreement. Beginning in 1971 and continuing through 1973, the Fund's monthly reports, which were used by Packard For Printing, contained the statement "sole owners or partners are not considered employees and may not participate."
Plaintiff applied for retirement benefits in December of 1972, indicating that he would retire in January of 1973. For the first time, the Fund began to make a determination of plaintiff's eligibility to participate in the Fund. It is the Fund's practice not to determine eligibility until the employee applies for retirement benefits. Aitken's application was processed and payment of benefits was approved. Plaintiff received benefits from February through August of 1973.
After further review of the documents submitted by plaintiff to the Fund, it was determined that plaintiff was a sole proprietor and as such ineligible to participate in the Fund. On August 22, 1973, a Fund agent directed the nominal trustee of the Fund to stop paying benefits to plaintiff.
Plaintiff asks either that the Fund be ordered to pay him retirement benefits in accordance with the provisions of the Retirement Plan, or that he be awarded compensatory, and in some instances, punitive damages. He advances seven grounds for relief: breach of the Retirement Plan contract; estoppel prohibiting the fund from denying his eligibility; breach of fiduciary duties; fraud; breach of a covenant of good faith and fair dealing; waiver of plaintiff's ineligibility; and intentional infliction of mental distress.
Initially, we must decide whether federal or state law governs plaintiff's claims. We conclude that federal law governs both the contract and estoppel claims. Interpreting a pension plan agreement permitted under 29 U.S.C. § 186, and determining whether a breach of that agreement has occurred, is a matter controlled by federal law. Rehmar v. Smith, 555 F.2d 1362, 1366-72 (9th Cir. 1976). Similarly, in this circuit the existence of an estoppel in suits against pension funds created under 22 U.S.C. § 186 is a matter of federal common law. Thurber v. Teamsters Pension Plan, 542 F.2d 1106 (9th Cir. 1976).
As to the remainder of Aitken's theories, the parties agree that liability questions are determined according to California law.
The Retirement Benefit Plan (Plan) gives the Fund Committee broad authority over questions of eligibility. The Plan provides that the Committee has the authority
To construe the provisions of the Trust and Plan, and to reconcile and correct any errors made in the administration of the Plan . . . (and also the authority) to determine all questions of eligibility for participation in the Plan, eligibility for retirement, credited service, amount of benefits payable, and all other questions which may arise in connection with the application and operation of the Plan, and to afford any Participant dissatisfied with any of such determinations the right to a hearing thereon.
Plan, Article V, § 5(c), (f). When the administrators of a labor-management fund have been given this authority to construe the agreement, their interpretations will not be overturned unless they are (1) arbitrary and capricious, (2) not supported by substantial evidence, or (3) erroneous on a question of law. Rehmar v. Smith, supra, 555 F.2d at 1371; Beam v. Masters, Mates and Pilots, 511 F.2d 975 (2d Cir. 1975). We conclude that the Committee's interpretation of the Plan is reasonable.
Not everyone who pays money to the Fund thereby becomes eligible to receive benefits. Rather, the Plan provides that "Participant" is defined as "any employee who is eligible for participation in the plan." "Employee" is defined to mean
any person employed by any (employer) working under a collective bargaining agreement between the Employer and the Union, employees of other contributors as defined in Article III and such other persons as may be eligible to participate in the Plan as set forth herein.
The employees who are eligible to participate in the Plan are described in Article III. 1
The language relied on by Aitken states that those eligible to participate include "Participants who submit payments in accordance with any permissible provisions of this retirement plan." Article IV, which describes how payments should be made to the Fund, also states: Appellees insist that direct payments from employees have never been allowed.
We think the parties to the agreement at least intended that...
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