Becker v. Pension Fund, Docket Nos. 16848

• Decision Date: 24 March 1975
• Docket Number: 18908,No. 1,Docket Nos. 16848,1
• Citation: 229 N.W.2d 888,59 Mich.App. 684
• Parties: Frank BECKER, Plaintiff-Appellee, v. PENSION FUND and Central States, Southeast and Southwest Areas, Defendants-Appellants. Frank BECKER, Plaintiff, Cross-Appellant, v. PENSION FUND and Central States, Southeast & Southwest Areas, Defendants, Cross-Appellees
• Court: Court of Appeal of Michigan — District of US

Page 888

229 N.W.2d 888

59 Mich.App. 684

Frank BECKER, Plaintiff-Appellee, v. PENSION FUND and Central States, Southeast and Southwest

Areas, Defendants-Appellants.

Frank BECKER, Plaintiff, Cross-Appellant, v. PENSION FUND and Central States, Southeast & Southwest

Areas, Defendants, Cross-Appellees.

Docket Nos. 16848, 18908.

Court of Appeals of Michigan, Division No. 1.

March 24, 1975.

Released for Publication June 11, 1975.

Hoffa, Chodak & Robiner by James P. Hoffa, Detroit, Goldberg, Previant & Uelmen by Alan M. Levy, Milwaukee, Wis., for defendants-appellants.

Foster, Meadows & Ballard by John L. Foster, Detroit, for plaintiff-appellee.

Before McGREGOR, P.J., and GILLIS and QUINN, JJ.

McGREGOR, Presiding Judge.

Plaintiff applied for, but was denied, pension benefits from defendant. Defendant denied plaintiff's eligibility for the benefits for the reason that he had not been employed for the requisite 20 years. The matter proceeded to trial and a jury returned a verdict in favor of the plaintiff. Judgment, inclusive of 'statutory interest', M.C.L.A. § 600.6013; M.S.A. § 27A.6013, was entered on March 23, 1973. Defendant appealed this decision to this Court. Plaintiff filed with this Court a motion for leave to file a motion to amend the circuit court judgment to add pre-complaint interest, which motion was granted. The circuit court, however, denied plaintiff's motion, and plaintiff appeals.

The paramount issue on appeal, as well as at trial, is whether plaintiff was an employee, as defined by the Teamsters Union Pension Fund, for the requisite 20 years, as determined by the jury.

The following is a chronological breakdown of plaintiff's employment career:

(1) 1908--1914--employed aboard various vessels on the Great Lakes, as buoy tender and porter, among other classifications.

(2) 1914 (6 months)--at Tower Creamery, Delivering by wagon, bulk milk.

(3) 1914--1923--employed at different jobs in various factories.

(4) 1923--1947--employed in the Sanitation Department for the City of Detroit. Duties included the 'handling of garbage', classified as a foreman, although he had no authority in hiring or firing of employee or control of the hours the employees worked. Defendant admits 'all I did was supervise'.

(5) 1947--1967--operated a tugboat business, the Frank Becker Towing Company, which was incorporated in 1955, at which time he joined the Teamsters' Union.

Dave Johnson, secretary-treasurer of Teamster Local 299, negotiated the pension plan into plaintiff's first Teamster contract. Although plaintiff indicated that he thought he was too old to retire and receive benefits from the plan, Johnson allegedly told him:

'Frank, you've been in transportation all your life. You are past 57 or 67. I believe you can go out in the Teamsters Union.'

Pension payments were made directly to the Local's office by the company's bookkeeper, plaintiff's wife. Plaintiff never drew a salary, before or after the incorporation of his towing company.

Upon reaching retirement age, plaintiff applied for pension benefits to the Plan's Trustees, giving his employment as a tugboat captain from 1946 until 1967. Federal Social Security records show no reported wages until 1956. The Trustees accorded plaintiff only 11 1/2 years' credit toward the requisite 20 years for pension benefits. The basis of such credit were only those years of employment subsequent to plaintiff's incorporation of his company.

The first issue raised for our consideration is whether there is any evidence to support the jury's verdict that defendant's denial of pension benefits to the plaintiff was arbitrary or capricious.

This Court has held that, if the jury's verdict is supported by evidence presented at trial, I.e., if it was within the range of the proofs, the same will not be disturbed on appeal. Jamison v. Lloyd, 51 Mich.App. 570, 577, 215 N.W.2d 763 (1974). The trial judge related the defendant's theory of the case to the jury in his instructions, stating that, if the Trustees' decision was not arbitrary, capricious or fraudulent at the time of their decision, their denial of benefits to the plaintiff must be sustained.

When dealing with such a conflict, the arbitrary or capricious standard is implemented. See Zdero v. Briggs Manufacturing Co., 338 Mich. 549, 61 N.W.2d 615 (1953); Tobin v. General Motors Corp., 17 Mich.App. 475, 169 N.W.2d 644 (1969). It has been held that the express terms of the Pension Trust may not be rewritten by the courts. Borngesser v. United Dairy Workers Pension Fund Committee, 375 Mich. 697, 703, 135 N.W.2d 381 (1965); Green v. Copco Steel & Engineering Co., 22 Mich.App. 16, 18, 1976 N.W.2d 690 (1970).

According to foreign authority, defendant's theory is correct. It has been held that, before the court's discretion may be substituted for that of the Pension Board under the plan, it must be affirmatively shown that the Board's determination is arbitrary, fraudulent, or in bad faith. Matthews v. Swift & Company, 465 F.2d 814, 820 (CA 5, 1972); Gitelson v. DuPont et al., 17 N.Y.2d 46, 268 N.Y.S.2d 11, 215 N.E.2d 336 (1966); Food Fair Stores, Inc. v. Greeley, 264 Md. 105, 285 A.2d 632 (1972). Moreover, pension plans are to be construed in favor of the employees. Frietzsche v. First Western Bank & Trust Co., 168 Cal.App.2d 705, 336 P.2d 589 (1959).

Defendant's pension requirements are that the employee must work for 20 years in a traditional teamster employment industry, to become eligible for pension benefits. Prior to the effective date of coverage of the Pension Plan, the employee is accorded credit for '(e)mployment in the Same classification of work in which employed after the effective date under a Teamster contract' and for 'employment requiring the Usual Teamster skills in Traditional Teamster industries at the time of such employment'. (Emphasis added.)

The Administrator of the Pension Benefit Department conceded that 'if he (the plaintiff) was a driver for the City of Detroit Garbage Department * * * we would have given him credit because that is a usual Teamster Industry'. Defendant's counsel agreed that from 1908 to 1918, plaintiff is entitled to credit, because it makes no difference whether the employee entering the Pension Plan is 'a sailor or * * * tugboat captain or whatever, he gets all that credit'. As to plaintiff's employment with the City of Detroit, it was the Administrator's position that the type of work performed by the plaintiff was not within the classification found in a Teamster contract. He did agree, however, that a 'driver' is within such classification; also inclusive are those employees who 'drove a team of horses and * * * milk wagons'.

It appears to this Court that the evidence is supportive of the jury's conclusion that the Trustees' action was arbitrary or capricious, in that (1) the Trustees arbitrarily accorded the plaintiff credit for 11 1/2 years after his company became incorporated, while denying him credit prior to the incorporation, notwithstanding the plaintiff's failure to draw a salary after his incorporation, and (2) the Trustees arbitrarily denied any credit for the plaintiff's employment on the various vessels on the Great Lakes from 1908 through 1914.

This Court now comes to the question of the validity of the trial court's denial of the defendant's motion for a directed verdict. In considering a motion for directed verdict, a trial court 'must view all the evidence and testimony adduced at trial in the light most favorable * * * to * * * the party against whom * * * made'. Kupkowski v. Avis Ford, Inc., 51 Mich.App. 668, 670, 215 N.W.2d 767, 768 (1974). If reasonable minds can differ on the particular question involved, the same was properly left for the jury's determination. Price v. Manistique Area Public Schools, 54 Mich.App. 127, 135, 220 N.W.2d 325 (1974); Kupkowski v. Avis Ford, Inc., Supra.

It is difficult for this Court to determine how the defendant admittedly treated the plaintiff as an employee in the operation of the Frank Becker Towing Company, subsequent to the incorporation of this company, while at the same time it claimed that prior to the incorporation, he was self-employed. This inconsistency is further compounded by the fact that plaintiff never once was paid a salary, either before or after incorporation. At the time the Trustees denied plaintiff's claim for pension payments, the 'totality of the file', I.e., defendant's exhibits L through AA in other documents, such as Social Security records, was before them. It is manifestly and totally illogical that the legal act of incorporation, coupled with plaintiff's failure to draw a salary, transforms plaintiff's status from an employer to an employee.

The trial court's jury instruction defining a supervisor is similar to that found in the Taft-Hartley Act:

'I charge you that the definition of a supervisor is any individual having authority in the interest of the employer to hire, transfer, suspend, lay-off, recall, promote, discharge, assign, reward or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent...