Molumby v. Shapleigh Hardware Co.

• Decision Date: 21 September 1965
• Docket Number: No. 31765,31765
• Citation: Molumby v. Shapleigh Hardware Co., 395 S.W.2d 221 (Mo. App. 1965)
• Parties: Lilly M. MOLUMBY, May Belle Boyne, Lorenz S. Sartori, Individually and as Members of a Class, Plaintiff-Appellants, v. SHAPLEIGH HARDWARE, COMPANY, a Corporation, and Mercantile Trust Company, a Corporation, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 221

395 S.W.2d 221

Lilly M. MOLUMBY, May Belle Boyne, Lorenz S. Sartori Individually and as Members of a Class, Plaintiff-Appellants, v. SHAPLEIGH HARDWARE, COMPANY, a Corporation, and Mercantile Trust Company, a Corporation, Defendants-Respondents.

No. 31765.

St. Louis Court of Appeals, Missouri.

Sept. 21, 1965.

Rehearing Denied Oct. 20, 1965.

William O. Cramer, Walter H. Pollmann, St. Louis, for plaintiffs-appellants.

Shepley, Kroeger, Fisse & Shepley, George S. Hecker, Thompson, Mitchell, Douglas & Neill, William G. Guerri, St. Louis, for defendants-respondents.

ROY W. McGHEE, Special Judge.

This is a class action, brought by three named plaintiffs on behalf of themselves and as representatives of a class comprising all former regular, full time, salaried employees of Shapleigh Hardware Company, against Shapleigh Hardware Company, a corporation and Mercantile Trust Company, a corporation, defendants, asking the Court to construe a pension plan and trust instrument, define and adjust the rights and status of plaintiffs and for a money judgment.

The trial court sustained defendant Shapleigh's motion to dismiss plaintiffs' first amended petition for failure to state facts upon which relief could be granted, as to both defendants, and with prejudice, and plaintiffs have appealed to this court.

We shall refer to the parties as plaintiffs and defendants.

Plaintiffs allege that on or about December 1, 1955, the defendant Shapleigh duly adopted a pension plan known as Shapleigh Hardware Company Salaried Pension Plan and at about the same time, to implement the plan, entered into a trust agreement with Boatmen's National Bank of St. Louis and that thereafter the trustee was changed to defendant herein, Mercantile Trust Company. That Shapleigh made contributions to the trust fund for several years after its adoption but that it has failed for a period of three years and more to contribute the full current cost of the plan and that by reason thereof the plan and trust entered into inactive terms. Further, the Plan as amended, in addition to providing for normal and postponed retirement, made provisions for early retirement of a member without the consent of the company. That the defendant Shapleigh was under a duty to advise plaintiffs of the existence and identity of the Pension Committee and the terms and conditions of the Plan and Trust Agreement, which it did not do and that such information was willfully and fraudulently concealed from plaintiffs and the class they represent by the defendant Shapleigh and its agents with an intent to deny to plaintiffs and the class they represent the rights of retirement provided by the Plan and Trust; that by reason of the fact plaintiffs and the class they represent did not know of the plan they could not request early retirement, and by inference that they would have done so had they known of the conditions of the Plan with reference to early retirement.

Plaintiffs further plead that their rights to benefits were vested rights after plaintiffs had met the age and service requirements as provided by the Plan; that these rights may be exercised at any time by an employee after he qualifies; that the Plan does not require notice to the defendant Shapleigh or to the Pension Committee by an otherwise qualified employee of his intent to retire; that after plaintiffs had met the requirements of the Plan for any retirement benefits described in the plan, they cannot be deprived thereof by afterwards being discharged; that after plaintiffs were discharged demand for benefits was made and refused by defendants.

In the alternative, plaintiffs pleaded defendant Shapleigh Hardware Company, a corporation, had dismissed all its employees once members of the Plan, sold its inventory and was no longer engaged in the same type of business as formerly; that it has no Pension Committee; that no persons other than plaintiffs and the class they represent will be entitled to benefits under the Plan and Trust; that the management of the corporation has changed since the adoption of the Plan and Trust and that the Plan and Trust are terminated under the terms of the Plan and generally therefore, plaintiffs are entitled to benefits to be derived by liquidation of the trust fund.

Plaintiffs' petition also sets forth that no money or benefits of any kind have ever been paid to any person or persons under the terms of the Plan and Trust; that on information and belief no pension committee was ever appointed. Both the Plan and Trust Agreement were by reference made a part of plaintiffs' first amended petition. Plaintiffs prayed the Court to enter its declaratory judgment, defining and adjusting the rights of the parties under the two instruments and for judgment against defendant, Mercantile Trust Co., Trustee for any amounts found to be due plaintiffs and for general relief.

Section 19 of the Plan provided: 'Neither the establishment of the Plan or Trust, nor any modification thereof, nor the payment of any benefits, shall be construed as giving any member or other person, any legal or equitable rights against the Company, the Trust, or the Committee, except as herein expressly granted to him.'

Section 32 of the Plan provided: 'A summary of this Plan shall be delivered forthwith upon Treasury Department approval of this Plan to each present salaried employee of the Company who is not precluded by age from being or becoming a member in the Plan, * * *. A copy of the Trust Agreement and of the Plan shall be kept available by the Company for inspection at reasonable times by any salaried employee of the Company.'

Section 26 of the Plan, among other things, provided: '* * * Within thirty (30) days after the permanent discontinuance of contributions to the Plan, the Committee shall give notice thereof to the Trustee and to all Members in the Plan.'

Section 20 of the Plan provided: 'Neither the establishment of the Plan or the Trust, nor any modification thereof, shall be construed as conferring any rights upon any member to be retained in the service of the Company, but, on the contrary, all members shall remain subject to suspension or dismissal, or discharge to the same extent as heretofore.'

Section 12 of the Plan, in effect provided that vested rights upon termination of membership in the plan were to accrue only to those who had served under the Plan for 10 years or more and for 20 years or more. It is conceded that none of plaintiffs can qualify under this section.

We note that the Plan was to be handled in all of its many details by a Pension Committee to be appointed and to serve at the pleasure of the Board of Directors of defendant Shapleigh and that plaintiffs allege upon their information and belief that the Pension Committee was not duly appointed. The failure of defendant Shapleigh to appoint this committee; the fact that no notice whatsoever of the Plan and Trust Agreement were ever given to plaintiffs and that there is no allegation by plaintiffs that the Plan was ever approved by the Treasury Department; that the funding of the Plan was discontinued by defendant Shapleigh and that no payments of any sort were ever made to anyone under the plan is a strong indication that the defendant Shapleigh, for some reason known only to the company, decided to abandon the Plan prior to making it operative and available to its salaried employees.

We here set forth paragraph 4 of the Plan for the purpose of showing that without the services of the committee it would have been next to impossible for the Plan to be operative: 'Pension Committee The Board of Directors of the Company shall appoint, to serve at its pleasure a pension committee (hereinafter called the 'Committee') to consist of four individuals, who shall administer the Plan consistently with the provisions hereof and uniformly with respect to persons similarly situated. Such Committee shall have power and authority to construe the Plan and, without amending the Plan or Trust, to establish rules and regulations which shall be binding on all persons. Among other things, the Committee shall determine under the provisions hereof, all facts relative to the eligibility, membership, or benefits of any employee or member, the time and method of distributing such benefits and the names of the persons to receive them; provided, however, that no member of the Committee shall act as such on any matter concerning his own eligibility, membership, or benefits. In the course of the administration of the Plan and Trust, the Committee may rely upon any information furnished by the Company as being accurate and based on uniform practices, and may rely upon any information furnished by an employee, member, or beneficiary, or upon any information otherwise acquired by the Committee which at the time it believes to be authoritative. The acts of the Committee shall be expressed * * *. No committeeman shall be liable, in the absence of fraud on his part, for any act or omission in the performance of his duties hereunder, and neither the Company nor the Trustee shall be liable for any act or omission in pursuance of the directions of the Committee.'

By Section 22 of the Plan it was provided that '* * * the Company shall be under no obligation to continue such deposits or to maintain the Plan or Trust for any length of time.' Section 23 provided: 'Any person having any claim under the Plan will look solely to the Trust Fund for the satisfaction thereof. Neither the Company nor any of its officers, employees, or any member of its Board of Directors guarantees in any manner the payment of the benefits under the Plan.' Further, the right was reserved to amend the plan, to suspend, or permanently discontinue the Plan at the pleasure of the defendant Shapleigh Hardware Co.

The provisions as to early retirement as amended in 1957 were that an employee who is a member of the Plan may retire, or may be retired by the Company at the end of any...