Richardson v. Central States, Southeast and Southwest Areas Pension Fund, s. 80-1527

• Citation: 645 F.2d 660
• Decision Date: 13 April 1981
• Docket Number: Nos. 80-1527,80-1581,s. 80-1527
• Parties: 2 Employee Benefits Ca 1477 Roy C. RICHARDSON, Appellee, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Appellant. Roy C. RICHARDSON, Appellant, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 660

645 F.2d 660

2 Employee Benefits Ca 1477

Roy C. RICHARDSON, Appellee, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND,

Appellant.

Roy C. RICHARDSON, Appellant, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Appellee.

Nos. 80-1527, 80-1581.

United States Court of Appeals Eighth Circuit.

Submitted March 10, 1981.

Decided April 13, 1981.

John R. Cleary, Kansas City, Mo., for Roy C. Richardson.

Alan M. Levy, Goldberg, Previant, Uelmen, Gratz, Miller, Levy & Brueggeman, S. C., Milwaukee, Wis., James G. Walsh, Jr., Steven A. Fehr, Jolley, Moran, Walsh, Hager & Gordon, Kansas City, Mo., for Central States, Southeast and Southwest Areas Pension Fund.

Before HEANEY and HENLEY, Circuit Judges, and PECK, ^* Senior Circuit Judge.

HEANEY, Circuit Judge.

This appeal involves an action filed in the district court under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(1)(B) (1976) (ERISA). The defendant, Central States Southeast and Southwest Areas Pension Fund (Fund) maintains and administers an employee benefit plan. The plaintiff, Richardson, originated this action in an effort to recover benefits due him from the Fund. The sole question raised on the merits was whether Richardson had completed "twenty years of service in the industry" when he retired in 1975.

The case was tried before the district court without a jury. The trial court determined that Richardson had completed the requisite twenty years of service in the industry as an employee of several trucking firms, and ordered the Fund to pay the plaintiff the sums due and owing as his normal retirement benefit. The district court denied the plaintiff's request for attorneys fees and prejudgment interest. The Fund appeals from the district court's ruling on the merits and the plaintiff appeals from the denial of attorneys fees and prejudgment interest. We affirm the order of the district court.

I

The decisive issue raised below was whether Richardson was an "employee" or an "independent contractor" during the period July, 1959, through April, 1964. ¹ The Fund's Committee of Trustees denied Richardson's application for benefits on the ground that between the relevant dates he was self-employed. The denial was affirmed by the Fund's Appeals Committee and again by the Full Board of Trustees (Trustees).

The district court, after a full hearing, concluded that the Trustees' denial of pension payment benefits was an abuse of its discretion. The court ruled, in substance, that the decision was not supported by any evidence and constituted an erroneous application of the applicable law under the general common law test incorporated into the Pension Plan through Article I § 7(d). ² See Morgan v. Mullins, 643 F.2d 1320 at 1321 (8th Cir. 1981); Bueneman v. Central States, Southeast and Southwest Areas Pension Fund, 572 F.2d 1208, 1209 (8th Cir. 1978); Phillips v. Kennedy, 542 F.2d 52, 54 (8th Cir. 1976).

Between the relevant dates Richardson performed truck driving services for King Van Lines. The relationship between Richardson and King Van Lines is the sum and substance of this case. If Richardson and King Van Lines did not share a master-servant relationship, then the claimant is entitled to no benefits. If the district court was correct in determining the existence of that relationship, the Trustees' decision was properly set aside.

In Hayes v. Morse, 474 F.2d 1265 (8th Cir. 1973), we stated: "The essential characteristics of master and servant relation is the retention by the employer of the right to direct and control the manner in which the work shall be performed." Id. at 1266 (emphasis in the original). In the instant case, the Company owned all transportation rights and permits under which Richardson operated. While Richardson owned the tractor unit, it was licensed to the Company and bore the Company's colors. Richardson pulled only Company-owned or Company-authorized trailers. King Van Lines, moreover, controlled assignments, booked shipments, collected payments and maintained total authority over Richardson's work under an "exclusive contract" agreement. The Company held "nonnegotiable" title to the equipment. The Company was authorized to discipline Richardson for violation of any contract terms. While Richardson may have selected his own routes, the Company determined when he had to report to work. Furthermore, the Company had to authorize any substitute drivers and Richardson could only refuse a trip in an emergency.

There is evidence in the record that the Company classified Richardson as an "independent contractor," that Richardson reported his income for Social Security and tax purposes as derived from self-employment, that he was paid on a percentage basis as opposed to separate amounts for wages and equipment rental and that he paid for fuel, insurance and a portion of the license fee. These factors, while relevant, do not support a finding that the Company lacked sufficient control over Richardson. "(T)he test lies in the degree to which the principal may intervene to control the details of the agent's performance." Hayes v. Morse, 347 F.Supp. 1081, 1084 (E.D.Mo.1972), aff'd, 474 F.2d 1265 (8th Cir. 1973) (quoting Radio City Music Hall Corp. v. United States, 135 F.2d 715, 717 (2d Cir. 1943)). Self-serving statements concerning how an individual is characterized, unrelated and unsupported by the actual working relationship, falls well short of the mark. We reaffirm Judge Webster's incisive reasoning in Hayes v. Morse, supra:

(I)t does not follow simply because owner/operators are not considered employees for purposes of Social Security that they are not employees within the meaning of the term as used in the Pension Fund * * * and the common law. The contrary has already been demonstrated.

347 F.Supp. at 1086, aff'd, 474 F.2d 1265 (8th Cir. 1973). Cf. Northern v. McGraw-Edison Co., 542 F.2d 1336, 1343 n.7 (8th Cir. 1976), cert. denied, 429 U.S. 1097, 97 S.Ct. 1115, 51 L.Ed.2d 544 (1977); Scheuer v. Central States Pension Fund, 358 F.Supp. 1332, 1335 (E.D.Wis.1973).

The Fund asserts that Wardle v. Central States, Southeast and Southwest Areas Pension Fund, 627 F.2d 820 (7th Cir. 1980), is on all fours with the instant case and mandates affirmance of the Trustees' denial of benefits. We disagree. In Wardle, the Trustees denied benefits for essentially the same reason it did here; it reasoned that the claimant was self-employed and, therefore, not eligible for benefits under the Plan. Wardle is, however, distinguishable from the case at bar. In Wardle, the claimant was subject to no restrictions on the personal use of his truck or his solicitation of business elsewhere. In the instant case, it is clear that the Company exercised almost complete control over Richardson's job-related duties. Moreover, we agree with the district court that the case at bar is virtually identical to Hayes v. Morse, supra. We find it significant that Wardle distinguished Hayes on several relevant grounds. Wardle distinguished Hayes on the basis that, in Hayes, (1) the claimant was not allowed to work for anyone other than the Company, (2) the employer was to approve all substitute drivers and (3) the employer could be identified by the physical appearance of the truck. These three factors are present in the instant case. We agree with Judge Swygert that these factors, as well as the other stated supra, are significant and materially distinguish the instant case from Wardle.

We hold that the district court correctly determined Richardson was an employee of King Van Lines and, therefore, entitled to pension payment benefits. The Trustees' denial of benefits on the basis that Richardson was an independent contractor cannot be supported on the basis of the record before us. Since it was based upon an erroneous application of law, it was properly set aside by the court below. ³

In so holding, we are aware of the fact that while contributions to the Fund on Richardson's behalf total less than $10,000, he could receive benefits in excess of $160,000. This potential "windfall" flows from the language in the Pension Plan which gives credit to certain persons for hours worked as employees in the trucking industry even though no contributions for those hours have been made to the Fund. This result is the fault of the Pension Plan, not that of the district court nor this Court. If the Trustees feel that a change is required to protect the integrity of the Fund, then it is their responsibility to make the change.

II

We are troubled by the decision of the Trustees for another reason. Assuming, arguendo, that the letters Richardson received from the Fund announcing its various decisions constitute the decisions of the Board of Trustees and its inferior committees, these decisions are wholly conclusory. They recite neither the facts of the case nor the rationale supporting their judgment. In these respects, they are similar to other decisions of the Trustees. Our concern is that we are not only asked to defer to the judgment of the Trustees, but we are also asked to do so without the benefit of a reasoned opinion. While we have no desire to complicate the lives of the Trustees, or to require a lengthy reasoned opinion in every case, we do feel that the Trustees are obligated to briefly state the facts of the case and the rationale for their decision. In this way, the Trustees may begin to build a body of precedent that will ultimately bring about a form of consistency otherwise lacking in the administration of the Fund.

This is not the first Court to question the sufficiency of the Trustees' decisions. In Wardle v. Central States, Southeast and Southwest Areas Pension Fund, supra, Judge Swygert stated:

we note with concern the skeletal nature of the letters explaining the (Trustees') reasons for its decision. Although they informed Wardle that his application had been denied because he was self-employed while...