Landro v. Glendenning Motorways, Inc.
| Decision Date | 08 August 1980 |
| Docket Number | No. 79-1628,79-1628 |
| Citation | 625 F.2d 1344 |
| Parties | Oscar LANDRO, Frank J. Shafranski, Bernard F. Benna, Margarete Wilson and LeRoy H. Schultz, Plaintiffs-Appellees, v. GLENDENNING MOTORWAYS, INC.; Glendenning Enterprises, Inc.; Glendenning Enterprises, Inc. Retirement Plan and Trust, aka Glendenning Motorways, Inc. Retirement Plan and Trust, Defendants-Appellants, Northwestern National Bank of Minneapolis, Trustee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Sheridan J. Buckley, Jr., St. Paul, Minn., for defendants-appellants.
James J. Ryan, Thomas, King, Swenson, Collatz & Ryan, St. Paul, Minn., for plaintiffs-appellees.
Before LAY, Chief Judge, HENLEY, Circuit Judge, and HANSON, * District Judge.
This is a suit under the civil enforcement provision of the Employee Retirement Income Security Act of 1974 (ERISA, or the Act), 29 U.S.C. § 1132. The pension plan in question was established by Glendenning Motorways, Inc. (Glendenning), one of the appellants, in 1968. 1 All appellees became employees of Glendenning in 1963; before then they had all been employees of Moland Brothers Trucking, Inc. (Moland), which was bought out by Glendenning in 1963. The main issue in the case is whether appellees are entitled to credit toward their pensions under the Glendenning pension plan for the years they worked for Moland. In the first of the rulings now on appeal, the district court, 2 after two days of trial to the court, held that "under the terms of the plan as interpreted by the Advisory Committee (established by the plan), plaintiffs must be given credit for their Moland years of service," and ordered appellants to compute appellees' pension benefits accordingly, making retroactive benefit payments where appropriate. Landro v. Glendenning Motorways, Inc., No. Civ. 3-77-384 (D.Minn., filed May 30, 1979) (judgment entered accordingly the same day). By a separate order filed on July 6, 1979, the district court awarded appellees $10,125 in attorney's fees pursuant to 29 U.S.C. § 1132(g); the second issue before us is whether this award was proper. We affirm both rulings of the district court.
The Glendenning Motorways, Inc. Retirement Plan and Trust (the Plan) wasapproved By its terms the Plan was to be administered by an Advisory Committee consisting of two persons designated by the board of directors; the first two members of this Committee were William A. Glendenning and H. V. Stuntebeck, president and secretary of Glendenning Motorways, Inc., respectively. 5 The December 27, 1968 resolution of the board of directors approving the Plan also authorized William Glendenning and Stuntebeck "to settle and approve all details in connection with said Plan, exercising their discretion to such extent as they shall deem appropriate in determining any and all questions which may arise in connection with said Plan . . . ." 6 The Advisory Committee as such was empowered by the terms of the Plan, "subject to all other terms and provisions of this Trust Agreement," to "decide all questions arising in the administration, interpretation and application (of the Plan), which decisions shall be binding and conclusive on all parties;" and "(i)n the exercise of the powers conferred upon it, the Advisory Committee shall have the broadest possible discretion . . . ." Art. XI, §§ 3 and 7. The Plan further provided that:
by the board of directors of Glendenning on December 27, 1968. The Plan was not collectively bargained; it was rather a unilateral undertaking by Glendenning, funded by Glendenning, in which only non-union or "non-contract" employees of the company were eligible to participate. 3 Four of the appellees Landro, Shafranski, Benna and Schultz were non-contract employees of both Moland and Glendenning; the fifth, Wilson, was a contract employee of Moland and of Glendenning until 1969, when she changed to non-contract status. 4
The COMPANY may amend this Trust at any time and from time to time by an instrument in writing executed in the name of the Company by an officer or officers duly authorized to execute such instrument . . . .
It is clear that Glendenning, and William Glendenning and Stuntebeck in particular, had well-nigh absolute control over the terms of the Plan itself and over any questions arising in the administration, interpretation and application of those terms.
Before its complete restatement in 1977 the Plan itself may fairly be said, as the district court found, to have been "silent as to credit for years worked with a predecessor employer, such as Moland." 7 The original version of the Plan provided only that:
Section 5. For purposes of this Article VI, a participant hereunder shall receive and be credited with "credited service" as that term is used herein in the amounts as specified in this Section 5 if he shall have been employed by the COMPANY (defined as Glendenning Motorways, Inc.) during any fiscal year for the number of hours as follows:
Hours of Employment Credited Service
------------------- ----------------
2,000 or more 1 year
More than 1,500 but less than 2,000 3/4 of a year
More than 1,000 but less than 1,500 1/2 of a year
More than 500 but less than 1,000 1/4 of a year
The possibility that hours of employment by a predecessor employer like Moland might be counted as hours of employment by Glendenning was not excluded by this or any other provision of the Plan. On the contrary, as early as March 24, 1969, Stuntebeck explained to one of the plaintiffs, Oscar Landro, "that we would get Moland employees would get full credit from the starting date with the initial company or any other company that was purchased by Glendenning." 8 As we shall see, this interpretation of the Plan was consistently followed by Glendenning, at least as to former Moland employees, in both word and deed, until 1977 when it was suddenly claimed all to have been a mistake.
The Plan was amended for the first time on November 21, 1969, by the addition of the following definition as Art. III, section 3, subsection (1):
"Years of credited service" or "credited service" shall mean that period of an employee's employment by the Company during which contributions to other deferred compensation, pension or retirement plans (other than life insurance policies) of any kind whatsoever, whether individually or pursuant to a collective bargaining agreement, are not made to or for the benefit of such employee.
This definition obviously did not resolve the uncertainty already noted in the terms of the Plan, as to whether employment by a predecessor employer would count as employment by Glendenning for the purpose of computing years of credited service. On the other hand, the definition does appear to exclude from credited service periods of employment, whether by Glendenning or a predecessor, during which contributions were made on behalf of an employee to another pension plan; and such contributions were made for many years by Moland, under its own plan for non-union employees, on behalf of Landro, Shafranski, Benna and Schultz. However, by the time that the Glendenning Plan came into existence, the Moland plan covering these four appellees had been liquidated and its assets distributed; 9 and it was open to the Advisory Committee to interpret the above exclusion in such a way that it did not apply to periods during which contributions were made to a pension plan no longer in existence, and from which employees could therefore expect no future benefits. 10 Such a construction is consistent with the words and actions of Glendenning and its Advisory Committee.
Glendenning began making substantial contributions toward the funding of the Plan in 1969 and taking tax deductions therefor. 11 The amounts of these contributions were based in part on the assumption that credit would be given to appellees for their years of service with Moland. Also beginning in 1969 appellees began receiving "Annual Reviews" of the benefits they could expect to receive under the Plan upon reaching their normal retirement dates. These documents (later called "Annual Statements") were prepared by a third party Plan administrator on the basis of information furnished by Glendenning. They showed among other things the employees' years of credited service, and an estimated monthly pension amount based on those years of service. The Annual Reviews sent to appellees consistently included their Moland years as years of credited service and to compute the estimated monthly pension amount at retirement. At the very least, the Annual Reviews must have confirmed in the minds of appellees their increasingly well-founded belief that they were to be credited under the terms of the Plan for their Moland years.
On December 20, 1970, an informational meeting was held in St. Paul, Minnesota, during which the Plan (as well as other Glendenning benefit programs) was explained to eligible employees by Stuntebeck. William Glendenning was present at the meeting. A small booklet was distributed to the employees that included a section entitled "Your Pension Plan." 12 Paragraph 8 of that section read as follows:
8. What are Years of Credited Service?
You receive a Year of Credited Service for each full year that you work between your initial employment and your retirement. You will receive partial credit for partial years worked according to the following schedule:
Accredited
Hours of Employment Service
------------------- .............. -------
2000 or more ....................... 1 Year
More than 1500 but less than 2000 .. 3/4 Year
More than 1000 but less than 1500 .. 1/2 Year
More than 500 but less than 1000 ... 1/4 Year
It will be observed that this paragraph was ambiguous in much the manner...
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