Folke v. Schaffer
Decision Date | 26 August 1985 |
Docket Number | Civ. A. No. 84-215 CMW. |
Citation | 616 F. Supp. 1322 |
Parties | Lowell FOLKE, Plaintiff, v. Charles J. SCHAFFER, Administrator of Teamsters Pension Trust Fund, Defendant. |
Court | U.S. District Court — District of Delaware |
COPYRIGHT MATERIAL OMITTED
John S. Grady, Dover, Del., for plaintiff.
Francis J. Trzuskowski of Trzuskowski, Kipp, Kelleher & Pearce, Wilmington, Del., for defendant.
This claim for early retirement benefits against a pension fund and its administrator is now before the Court on cross motions for summary judgment. The plaintiff, Lowell Folke ("Folke"), is a resident of Delaware and was a member of Teamsters Local No. 326, of Wilmington, Delaware, from 1969 to November, 1980. The defendant, Charles J. Schaffer ("Schaffer"), is the administrator of the Teamsters Pension Plan of Philadelphia & Vicinity (the "Plan"), which is the vehicle for administering the Teamsters Pension Trust Fund of Philadelphia and Vicinity (the "Fund").
The Court has subject matter jurisdiction over the claims involved in this case by the jurisdictional provision of ERISA, 29 U.S.C. § 1132(e)(1). See Reiherzer v. Shannon, 581 F.2d 1266 (7th Cir.1978); Dimond v. Retirement Plan for Employees of Michael Baker Corp., 582 F.Supp. 892 (W.D.Pa.1983). While defendant Schaffer has stated in his answer that he "denies that this Court has jurisdiction under 29 U.S.C. § 1132", he has not alleged any specific facts as a basis for denying subject matter jurisdiction, nor has he briefed this issue on his motion for summary judgment. Any objection to personal jurisdiction or venue has been waived.1
Although ERISA does not explicitly require a plaintiff to exhaust his remedies under a pension plan before bringing suit, courts have read such a requirement into the statute. See Amato v. Bernard, 618 F.2d 559, 567-68 (9th Cir.1980); Tomczyscyn v. Teamsters, Local 115 Health & Welfare Fund, 590 F.Supp. 211, 215-16 (E.D. Pa.1984). In the present case, Folke did everything he could reasonably be expected to have done to convene an appeal hearing by the Fund's trustees. In view of the defendants' persistent refusal to grant Folke an appeal on his denied claim and Schaffer's view that an appeal would have been pointless, the Court finds that Folke has adequately complied with the exhaustion of remedies requirement.2
On October 14, 1981, Folke filed a written application for early retirement benefits under the Plan. The processing of this application involved obtaining written confirmation of Folke's employment history from the Social Security Administration, and this information was not received by the Fund until February 11, 1982. On April 1, 1982, Schaffer requested information from Folke about his current employment status, and Folke responded on April 5, 1982, with the information that he was then employed doing construction and building maintenance work for Delmar Q.K. Distributors, Inc., in Wyoming, Delaware. On April 8, 1982, Schaffer advised Folke that the processing of his application for early retirement benefits had been completed and that Folke had earned 10.96 years of benefit service and 11 years of vesting service under the Plan. Schaffer also informed Folke, "the above Service sic will be sufficient for your benefits to be Vested sic until your actual retirement." Folke then retained counsel, who wrote to Schaffer on April 19, 1982 requesting that the Fund explicitly state whether Folke's application for early retirement benefits was being denied, so that an appeal could be taken, if necessary. On April 23, 1982, Schaffer replied that Folke's application for early retirement benefits was being denied because Folke was currently employed, and the Department of Labor's recently issued regulations on suspension of benefits did not permit a beneficiary of a pension plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA") to work in any capacity whatever while receiving early retirement benefits.
There followed a fruitless attempt by Folke, through his attorney, to convene an appeal hearing on the Fund's denial of his early retirement benefits. On May 3, 1982, Schaffer informed Folke's counsel that he would be notified as soon as a hearing was scheduled. On June 21, 1982, Folke's counsel wrote to Schaffer again requesting a date for a hearing but received no reply. Subsequently, in telephone conversations with Schaffer, Folke's counsel was informed that the Fund's trustees were not scheduled to meet and that there was no point in having a hearing, since Folke was not entitled to early retirement benefits. Folke then sought assistance from his Congressman, the Hon. Thomas Evans, a member of whose staff telephoned Schaffer in September, 1982, to inquire about Folke's case. Schaffer replied to this inquiry by his letter of September 15, 1982, which stated that, because Folke was currently employed, he was not entitled to early retirement benefits under the new suspension of benefits regulations adopted by the Fund. On April 18, 1984, Folke filed the complaint in this suit.
Teamsters Pension Plan of Philadelphia & Vicinity, article IV (1981).
Folke maintains that he is entitled to early retirement benefits under this provision and that this provision was in effect both at the time he applied for early retirement benefits and at the time his application was decided. Alternatively, Folke argues that, even if the Plan was amended by the time a decision was made on his application, he is entitled to early retirement benefits under the old Plan, because he had supplied all the information required from him in October, 1981, and there was undue delay in processing his application. Finally, Folke maintains that he is entitled to early retirement benefits because the defendants failed to comply with the procedural due process guarantees of ERISA. The defendants assert that the quoted provision was amended, effective January 1, 1982, to provide that early retirement benefits are not available to any participant who is re-employed in any capacity whatsoever, and that any delay in the processing of Folke's application was due to reasons beyond their control.
The standard for reviewing the Fund's decision is whether it was arbitrary and capricious in light of the language of the Plan. See Govoni v. Bricklayers, Masons & Plasterers International Union, 732 F.2d 250, 252 (1st Cir.1984); Rosen v. Hotel and Restaurant Employees & Bartenders Union, 637 F.2d 592, 596 n. 5 (3d Cir.1981); Wardle v. Central States, Southeast and Southwest Areas Pension Fund, 627 F.2d 820, 823-24 (7th Cir.1980). Under article II, section A of the Plan, the approval of the trustees is required to receive benefits, and under article V, section D the trustees can require the information they deem reasonably necessary for making a decision about benefits to be supplied before a decision is made. Pursuant to this provision, the Fund requested confirmation of Folke's employment record from the Social Security Administration and information concerning Folke's current employment from Folke himself.
Under regulations enacted pursuant to ERISA and in effect at the time Folke applied for early retirement benefits, "if a claim is wholly or partially denied, notice of the decision ... shall be furnished to the claimant within a reasonable period of time after receipt of the claim by the plan." 29 C.F.R. § 2560.503-1(e)(1) (1981) (emphasis added). Schaffer's letter of April 8, 1982, which merely stated "under the provisions of the Pension Plan, the above Service will be sufficient for your benefits to be Vested sic until your actual retirement," did not provide adequate notice of the Fund's decision to deny early retirement benefits. Nevertheless, Folke was informed of the Fund's decision two weeks later when Schaffer responded to his attorneys' request for a statement of the Fund's decision. The principal delay in processing Folke's application was caused by the time needed for the Social Security Administration to confirm Folke's employment history — approximately four months. Exclusive of this four month period, Folke's application was in the hands of the Fund approximately eight weeks before he received an unambiguous decision.
Since Folke's notarized application was received by the Fund some time after October 19, 1981 and the Fund notified Folke of its decision on April 23, 1982, the Fund barely complied with the 180 day reasonable time requirement of the regulations. However, even if the time taken for processing Folke's claim is deemed unreasonable, the result will be...
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