Kendall v. Twin Cities Iron Workers Pension Plan

• Decision Date: 06 September 2012
• Docket Number: Civil No. 10–3140 (MJD/JJG).
• Citation: 893 F.Supp.2d 988
• Parties: Ronald D. KENDALL, Plaintiff, v. TWIN CITIES IRON WORKERS PENSION PLAN, Board of Trustees of the Twin City Iron Workers Pension Plan, and Wilson–McShane Corporation, Defendants.
• Court: U.S. District Court — District of Minnesota

893 F.Supp.2d 988

Ronald D. KENDALL, Plaintiff,

v.TWIN CITIES IRON WORKERS PENSION PLAN, Board of Trustees of the Twin City Iron Workers Pension Plan, and Wilson–McShane Corporation, Defendants.

Civil No. 10–3140 (MJD/JJG).

United States District Court,

D. Minnesota.

Sept. 6, 2012.

David E. Wandling, Wandling Law Group, PC, for Plaintiff Ronald D. Kendall.

Deborah A. Ellingboe, Justin P. Krypel, and Steven L. Severson, Faegre Baker Daniels LLP, for Defendants Twin City Iron Workers Pension Plan, Board of Trustees of the Twin City Iron Workers Pension Plan, and Wilson–McShane Corporation.

Memorandum of Law & Order

MICHAEL J. DAVIS, Chief Judge.

I. Introduction

This matter is before the Court on Defendants Twin City Iron Workers Pension Plan, Board of Trustees of the Twin City Iron Workers Pension Plan, and Wilson–McShane Corporation's motion for summary judgment. [Docket No. 37.] Oral argument on the motion was heard on June 1, 2012.

II. BackgroundA. Factual History

Plaintiff Ronald D. Kendall began work as an ironworker in 1976. With few exceptions, he remained in that profession for over thirty years before retiring in September 2009. Until the end of 2005, he participated in the International Association of Bridge, Structural and Ornamental Iron Workers Local 793 Pension Plan (“793 Plan,” Wandling Decl. [Docket Nos. 46–47], Ex. C)—a defined benefit pension plan governed by the Employment Retirement Income Security Act of 1974 (“ERISA”) and maintained for the benefit of North Dakota ironworkers. On December 31, 2005, the 793 Plan was merged into Defendant Twin City Iron Workers Pension Plan (“TCIW Plan,” Wandling Decl., Ex. G), and Plaintiff thereafter was a participant in the TCIW Plan until his retirement.

When Plaintiff worked outside of the 793 Plan's North Dakota jurisdiction, the Iron Workers International Reciprocal Pension Agreement applied. (“Reciprocal Agreement,” Wandling Decl., Ex. D.) The Reciprocal Agreement provides that the local union pension fund collect pension contribution payments from employers and forward them back to the employee's “home plan.” Local plans are to collect contributions based on their local contribution levels and “shall transfer the actual dollar amount of contributions received regardless of any difference in the contribution rates between the Funds.” ( Id., “Exhibit ‘B’ ” § 5.) From December 1987 until December 2005 the majority of Plaintiff's work was in the jurisdiction of the TCIW. TCIW thus collected pension contributions from Plaintiff's employers and forwarded them to the 793 Plan—Plaintiff's “home plan.” This case concerns the pension benefit granted to Plaintiff upon his retirement based on the contributions forwarded from TWIC to the 793 Plan between 1988 and 2000.

In the years Plaintiff participated in the 793 Plan and worked in the TCIW's jurisdiction, he received statements from the 793 Plan's third-party plan administrator, American Benefit Plan Administrators (“ABPA”). ( Id., Ex. F.) The ABPA statements included an accounting of “Hours Reported by Employers.” The parties agree that the hours reported in the ABPA statements reflect many more hours than those actually worked by Plaintiff in the years covered. The reported hours appear to have been calculated based on an assumed contribution rate of $0.70 per hour. That is, for a given year, the dollar amount of pension contributions forwarded to the 793 Plan was divided by 0.70 and the result was the “hours reported” figure included on the APBA statements. For example, in 1989, TWIC forwarded $4,879.26 in contributions to the 793 Plan. That amount, divided by 0.70, equals the 6,970 “hours reported” figure on the ABPA statements, while Plaintiff actually worked only 1,826 hours during the relevant time period.

Until some point in 1999 or 2000, the ABPA reports stated that the “hours reported” were “UNAUDITED” that that “ALL HOURS REPORTED AND CREDIT INDICATED WILL BE VERIFIED AT THE TIME OF RETIREMENT.” ( Id.) During this time period, Plaintiff also received statements from TCIW, stating the actual hours that he had worked in its jurisdiction. (Defs.' Mem. [Docket Nos. 39–40], Ex. J.)

Sometime in the late 1980s or early 1990s, after receiving an ABPA statement which indicated that he had worked over five thousand hours more hours than he had actually worked, Plaintiff spoke with an ABPA representative to inquire if the figure was accurate. (Kendall Dep., id., Ex. E, 57:10–21; Kendall Decl. [Docket No. 45] ¶ 12.) He states that ABPA informed him that the figure was accurate and that he should use the figure to figure his future retirement benefits. ( Id.)

The 793 Plan and the TCIW Plan merged on December 31, 2005, and all of the 793 Plan's assets and liabilities were assumed by the TCIW Plan. The parties agree that TWIC is obligated to pay benefits earned by Plaintiff as of that date. At all relevant times, Defendant Wilson–McShane Corporation (“Wilson–McShane”) has been the administrative service provider for the TCIW Plan. Thus, when the two plans merged, Wilson–McShane began to administer Plaintiff's pension. Wilson–McShane provides administrative services for the TCIW Plan, including receiving contributions from employers, bookkeeping, recordkeeping, and calculating benefits based on the plan terms. Wilson–McShane maintains, however, that it is the Defendant Board of Trustees of the TCIW Plan (“Trustees”) that bears the ultimate decision making authority with respect to benefit calculations.

In May 2006, in response to an inquiry by Plaintiff, a Wilson–McShane employee prepared an estimate of Plaintiff's accrued pension benefits. The total estimated monthly benefits, assuming retirement at age 55 and a single life benefit, was $3,595. (Defs.' Mem., Ex. L.) Plaintiff again sought an estimate of his pension benefits in March 2009. At that time Wilson–McShane estimated that he would be entitled to either a $3,410.31 or $3,308.00 monthly benefit under the 793 Plan and a $207.64 monthly benefit under the TCIW Plan. ( Id., Ex. M.)

Plaintiff believed that his benefits should have been calculated to be higher based on the “reported hours” figures in the ABPA statements that he had received. He met with Wilson–McShane representatives who showed him a computer printout and explained how Wilson–McShane arrived at its estimate. ( See id., Ex. X.) The printout shows the total contribution forwarded to the 793 Plan on Plaintiff's behalf, a contribution “rate,” and an “hours” figure which is the same as the “hours reported” figure which appeared on the ABPA statements which Plaintiff had received. The Wilson–McShane employees explained to Plaintiff that the “hours reported” figures on the printout were incorrect and that his estimated benefit was based on the actual total contributions made on his behalf by employers, which were correctly reflected on the printout.

In June 2009, Plaintiff applied for his retirement benefits. Wilson–McShane applied essentially the same formula that it had when providing Plaintiff with estimates: It took the actual yearly payments made on Plaintiff's behalf by his employers to the fund and multiplied those figures by percentages set out in the 793 Plan. ( See 793 Plan, § 3.02.) The total monthly benefit derived from this calculation is significantly lower than the one based on the ABPA's inflated “reported hours” to which Plaintiff believes that he is entitled, but it is quite similar to the estimates previously prepared by Wilson–McShane.

Through counsel, Plaintiff objected to Wilson–McShane's calculation. His objection was presented to Joint Benefits Committee of the TCIW Plan Board of Trustees. The Committee concluded that Wilson–McShane's calculation was correct, and it directed Wilson–McShane to deny Plaintiff's request for a larger pension benefit. (Defs.' Mem., Ex. R at 2–3.) Plaintiff appealed the decision and, in a February 19, 2010 letter, the Trustees denied his appeal. ( Id., Ex. K.) The Trustees explained that they had calculated Plaintiff's benefit amount by multiplying the total actual contributions made by Plaintiff's employers over the disputed years by the percentages or “contribution rates” specified in the 793 Plan. ( Id. at 2.) The Board of Trustees stated that the “hours reported” figures from the ABPA were erroneous and did not affect the pension benefit calculations because, pursuant to the plan's plain language, those calculations should be based on the actual contributions made by Plaintiff's employers. ( Id. at 3 n. 3.)

B. Procedural History

Plaintiff brought this action in July 2010, naming the current Defendants as well as ABPA and the 793 Plan in his complaint and asserting numerous claims. Defendants moved to dismiss Plaintiff's complaint. In an April 11, 2011 Memorandum of Law & Order [Docket No. 27], 2011 WL 1363996, the Court dismissed all claims against ABPA and the 793 Plan. The Court also dismissed several of Plaintiff's claims against the current Defendants, but the Court also allowed other claims to remain and granted Plaintiff leave to file an amended complaint. Plaintiff's Amended Complaint [Docket No. 28] now asserts two claims: Count I sets forth an ERISA denial of benefits claim against the TCIW Plan and the TCIW Plan Trustees, while Count II asserts a promissory estoppel claim against Wilson–McShane. Discovery having concluded, the remaining defendants have now moved for summary judgment as to both counts.

III. DiscussionA. Standard

Summary judgment is appropriate if, viewing all facts in the light most favorable to the non-moving party, there is no genuinedispute as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party seeking summary judgment bears the burden of showing that there is no genuine dispute as to any material fact. Id. at 323, 106 S.Ct. 2548. Summary judgment is...