Harris v. New Haven Foundry, Inc., Docket No. 58858

• Decision Date: 06 January 1983
• Docket Number: Docket No. 58858
• Citation: 120 Mich.App. 629,327 N.W.2d 540
• Parties: Ned Lee HARRIS, Plaintiff-Appellee, v. NEW HAVEN FOUNDRY, INC., and New Haven Foundry Hourly Employees Retirement Income Plan Joint Committee in Charge of its Administration, Jointly and Severally, Defendants- Appellants. 120 Mich.App. 629, 327 N.W.2d 540
• Court: Court of Appeal of Michigan — District of US

Page 540

327 N.W.2d 540

Ned Lee HARRIS, Plaintiff-Appellee, v. NEW HAVEN FOUNDRY, INC., and New Haven Foundry Hourly Employees Retirement Income Plan Joint Committee in Charge of its Administration, Jointly and Severally Defendants- Appellants.

Docket No. 58858.

120 Mich.App. 629, 327 N.W.2d 540

Court of Appeals of Michigan.

Submitted July 14, 1982.

Decided Oct. 19, 1982.

Released for Publication Jan. 6, 1983.

[120 MICHAPP 629] Dietrich & Cassavaugh, P.C. by William T. Spencer, Detroit, for plaintiff-appellee.

[120 MICHAPP 630] Glime, Daoust, Wilds, Rusing & Widlak by Dennis R. Leduc, Mount Clemens, for New Haven Foundry, Inc.

Lacey & Jones by John Hayes, Detroit, for New Haven Foundry Hourly Employees Retirement Income Plan Joint Committee in Charge of Administration.

Before T.M. BURNS, P.J., and BEASLEY and SIMON, ^* JJ.

PER CURIAM.

Defendants appeal as of right the trial court's order granting summary judgment for plaintiff.

Plaintiff worked full time for defendant New Haven Foundry from September 2, 1955, until February 22, 1974. He was officially terminated from work in April, 1974. Over 13 months later, he first filed for disability pension benefits claiming that he had stopped working due to chronic bronchitis, pulmonary emphysema, hypertension, and a number of other ailments. He claimed that he had been totally and permanently disabled from any employment since his last day at work.

On September 24, 1975, the pension committee unanimously denied plaintiff's application claiming that it was untimely and that instead, plaintiff should have applied for benefits before he left work.

The first issue in this case is the appropriate standard of review. Although the courts across the country have employed different terminologies in defining this standard, we will follow the Sixth Circuit's standard limiting review to "whether the decision of the Trustees is arbitrary or capricious, made in bad faith, not supported by substantial [120 MICHAPP 631] evidence or contrary to law". Hall v. Mullins, 621 F.2d 253, 254 (CA 6, 1980). See also Rehmar v. Smith, 555 F.2d 1362, 1371 (CA 9, 1976). However, this standard does not preclude the reviewing court from determining the reasonableness of the trustee's interpretation. As such, an interpretation will be upheld unless it is unreasonable. Gordon v. ILWU-PMA Benefit Funds, 616 F.2d 433 (CA 9, 1980). A reviewing court may not substitute its own judgment for that of the trustees. Gordon; Powers v. Fisher Controls Co., Inc., 246 N.W.2d 279 (Iowa, 1976). In fact, a court may not choose between two reasonable interpretations to see which is more reasonable. Miniard v. Lewis, 128 U.S.App.D.C. 299, 387 F.2d 864 (1967), cert. den. 393 U.S. 873, 89 S.Ct. 166, 21 L.Ed.2d 144 (1968). See also Riley v. Meba Pension Trust, 570 F.2d 406 (CA 2, 1977). The court is to look at a fair reading of the contract. Bayles v. Central States Southeast and Southwest Areas Pension Fund, 602 F.2d 97 (CA 5, 1979).

Plaintiff's employment and his eligibility for pension benefits are governed by a collective bargaining agreement. This agreement provides for a pension plan to be administered providing for old age and disability retirement income security to eligible employees. The crucial section in the agreement is article 2.3:

"An employee with ten (10) years or more of credited service who becomes totally and permanently disabled prior to reaching the age of sixty-five (65) and whose service has not been terminated prior thereto shall be eligible for a Disability Retirement Benefit * * *."

Defendants argue that plaintiff was not eligible to receive benefits because he was not an "employee"[120 MICHAPP 632] within this section. "Employee" is defined as:

"1.4 'Employee' means a person who receives from the Company compensation for personal services as an employee on a full time basis regularly employed for twenty (20) or more hours per week (or five (5) or more months per year) who becomes a member of and remains within a Participating Unit which the Company has brought under and continued within this Plan.

* * *

"Any employee on sick leave which commenced prior to the effective date of the Plan shall not be eligible for any benefits under the Plan unless he returns to active work after the effective date and meets the other eligibility requirements for said benefits."

Defendants are arguing that one cannot be an "employee" unless presently employed and that if the agreement had meant to include someone who is not presently employed, it would have used the word "participant".

However, we do not see how the use of the words "remains" and "receives" (present tense) shows an intention to restrict eligibility to those presently employed at the time that benefits are applied for. This article allows a person to qualify as an "employee" so long as he meets two conditions: (1) receiving...