EM Trucks, Inc. v. CENTRAL STATES, ETC., 5-81-Civ 27.

• Decision Date: 06 July 1981
• Docket Number: No. 5-81-Civ 27.,5-81-Civ 27.
• Citation: 517 F. Supp. 1122
• Parties: E. M. TRUCKS, INC., a Minnesota Corporation, Plaintiff, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION PLAN, Defendant.
• Court: U.S. District Court — District of Minnesota

517 F. Supp. 1122

E. M. TRUCKS, INC., a Minnesota Corporation, Plaintiff, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION PLAN, Defendant.

No. 5-81-Civ 27.

United States District Court, D. Minnesota, Fifth Division.

July 6, 1981.

Van Evera, Koskinen, Clure, Andrew & Signorelli by Kenneth D. Butler, Duluth, Minn., for plaintiff.

Robins, Zelle, Larson & Kaplan by Ernest I. Reveal, Saint Paul, Minn., for defendant.

MEMORANDUM ORDER

ALSOP, District Judge.

This matter comes before the court upon the motions of both parties for summary judgment. Memoranda were submitted on behalf of the parties, and oral argument was heard on June 4, 1981.

BACKGROUND

Between 1974 and early 1977, employees of plaintiff working in plaintiff's Truck Parts Department were participants in the defendant Plan. On or about April 14, 1977, a new collective bargaining agreement between plaintiff and the Union for these employees went into effect, thereby terminating the employees' participation in the Plan. Plaintiff mistakenly continued to make contributions to the defendant Plan on behalf of its Truck Parts Department employees from May 27, 1977 through March 29, 1980, in the total amount of $16,960.00.

In May of 1980, plaintiff demanded the return of the $16,960.00 mistakenly paid to defendant. Defendant's Trustees automatically credited plaintiff with $1008.00 for the contributions paid from January 27 through March 29, 1980, but determined that the remaining contributions were made as a result of a mistake of law and therefore could not be returned under 29 U.S.C. § 1103(c) and the Trust Agreement governing defendant.

On September 26, 1980, Public Law 96-364 was enacted. It amended 29 U.S.C. § 1103(c)(2) to permit the return to employers of contributions made by mistake of fact or of law within six months after the plan administrator determines the contributions were mistakenly made, effective retroactively from 1975. As a result of this amendment, the Trustees of defendant amended the applicable Trust Agreement by adopting a resolution which — though refusing to reverse prior denials of refund requests — permitted a refund for mistaken contributions if application therefor is received within one year of the mistaken payment. The resolution was deemed to be effective "relative to the Trustees' decision on and after September 26, 1980, upon application for employer contribution refunds."

On December 18, 1980, defendant received plaintiff's renewed request for a refund. Defendant's Trustees agreed to refund $816.00 for the contributions made by plaintiff on or after December 18, 1979 and not previously credited to plaintiff. However, the Trustees refused to refund any other contributions.

Plaintiff commenced the above-entitled action on March 4, 1981 to recover the remaining contributions, in the amount of $15,136.00, together with interest and reasonable attorney's fees.

DISCUSSION

Defendant asserts that plaintiff's Complaint should be dismissed because of plaintiff's failure to "properly" allege subject matter jurisdiction. The court disagrees. Although jurisdiction does not exist under 29 U.S.C. § 1451, as alleged in the Complaint, defendant concedes that federal question jurisdiction exists under 28 U.S.C. § 1331. Consequently, plaintiffs should and will be permitted to amend their Complaint to allege jurisdiction pursuant to 28 U.S.C. § 1331.

Defendant's more substantial argument for dismissal is that 29 U.S.C. § 1103(c)(2)(A) permits, but does not require, trust funds to return mistakenly paid contributions. Plaintiff does not dispute that the amended Trust Agreement presently governing defendant bars the return of contributions plaintiff paid more than one year prior to defendant's receipt on December 18, 1980 of plaintiff's renewed request for refund.¹ However, plaintiff argues that regardless of the terms of the Trust Agreement, 29 U.S.C. § 1103(c)(2)(A) requires the return of all payments made because of a mistake of law or of fact on or after January 1, 1975 if request therefor is made within six months of the wrongful payment or by March 26, 1981, whichever is later.

29 U.S.C. § 1103(c)(2)(A), in pertinent part, states:

In the case of a contribution ... made by an employer to a multiemployer plan by a mistake of fact or law, ... paragraph 1 shall not prohibit the return of such contribution ... to the employer within 6 months after the plan administrator determines that the contribution was made by such a mistake.²

In amending 29 U.S.C. § 1103(c)(2)(A) in 1980, Congress provided that the amended section would be effective retroactively to January 1, 1975 and that determinations of mistake made prior to the enactment of the amendment (September 26, 1980) would be treated as made on the date of enactment for purposes of the six-month limitation period. Public Law 96-364, Section 410(c).

The court finds instructive the recent opinion of the United States Court of Appeals for the Fourth Circuit in Teamsters Local 639—Employers Health Trust v. Cassidy Trucking, Inc., 646 F.2d 865 (1981). There, the Court held that the predecessor to the present 29 U.S.C. § 1103(c)(2)(A) did not make recovery of mistaken payments automatic, but made recovery subject to "the traditional principles of equity which are applicable to such cases." Slip Op., at 7. In addition, the Court clearly indicated that "under the appropriate equitable principles" an employer could be "entitled to restitution." Slip Op., at 8.

This court agrees with the Fourth Circuit Court of Appeals that 29 U.S.C. § 1103(c)(2)(A) does not make the refund of mistaken payments automatic. In addition, the court holds that such payments must be refunded if equity so requires.

This holding is supported by the purposes and overall structure of ERISA. 29 U.S.C. § 1001(a) states the Congressional finding "that it is ... desirable ... that minimum standards be provided assuring the equitable character of ... plans ...." Moreover, if — as defendant contends — § 1103(c)(2)(A) were totally "permissive," trustees of funds usually...