Sweet v. Consolidated Aluminum Corp.

• Decision Date: 14 August 1990
• Docket Number: 88-1518,Nos. 88-1517,s. 88-1517
• Citation: 913 F.2d 268
• Parties: , 12 Employee Benefits Ca 2365 Carl D. SWEET, Personal Representative of the Estate of Edward Joseph Sweet, Deceased, Plaintiff-Appellant, Cross-Appellee, v. CONSOLIDATED ALUMINUM CORPORATION and Manufacturers Hanover Trust Company, Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 268

913 F.2d 268

59 USLW 2200, 12 Employee Benefits Ca 2365

Carl D. SWEET, Personal Representative of the Estate of Edward Joseph Sweet, Deceased, Plaintiff-Appellant, Cross-Appellee, v. CONSOLIDATED ALUMINUM CORPORATION and Manufacturers Hanover

Trust Company, Defendants-Appellees, Cross-Appellants.

Nos. 88-1517, 88-1518.

United States Court of Appeals, Sixth Circuit.

Argued Sept. 18, 1989.

Decided Aug. 14, 1990.

Randy S. Hyrns, argued, Globensky, Gleiss & Bittner, St. Joseph, Mich., for plaintiff-appellant cross-appellee.

Joel M. Boyden, Stephen S. Muhich, argued, Marilyn S. Nickell, Dykema, Gossett, Spencer, Goodnow & Trigg, Grand Rapids, Mich., Barry A. Short, Joseph Weyrich, Lewis & Rice, St. Louis, Mo., for defendants-appellees cross-appellants.

Before NELSON and RYAN, Circuit Judges, and MEREDITH, District Judge. ^*

MEREDITH, District Judge.

This appeal raises two issues regarding attorney fees and costs and whether the plaintiff-appellant is entitled to pre-judgment interest on pension benefits from the date of the appointment of the special administrator.

The appeal stems from a claim for pension benefits made by the plaintiff-appellant, Carl D. Sweet, Personal Representative of the Estate of Edward Joseph Sweet.

Edward Joseph Sweet, deceased, was a former employee of Miller Industries. Defendant, Consolidated Aluminum Corporation, is the successor to Miller Industries. Manufacturers Hanover Trust is the Trustee of the pension plan in which the decedent had a vested interest through his employment. Edward Joseph Sweet retired from Consolidated in 1973 and elected payment of his retirement allowances as a lifetime payment with a ten year guarantee. Under this election, Mr. Sweet was to receive monthly installment payments of $208.28 commencing on April 1, 1973 with a guaranteed ten year payment period. Mr. Sweet collected his monthly retirement pension benefits through September 1, 1975, at which time payments ceased to be made by Manufacturers Hanover.

Edward Joseph Sweet disappeared on or about May 12, 1975. The facts surrounding his disappearance were submitted by affidavit of Carl Sweet to Probate Court for the County of Berrien in File No. 27505(L). On November 10, 1975, Carl Sweet was appointed Special Administrator of the Estate of Edward Joseph Sweet. (Carl Sweet, son of Edward J. Sweet, was named beneficiary under the pension plan.) Under the terms of the Probate order, the Special Administrator "shall collect and take charge of the Estate of Edward Joseph Sweet until the fact of death or survival of Mr. Sweet can be satisfactorily established."

After notification by plaintiff's attorney of the probate order, by letter dated November 26, 1975, C.O. Griffin, Treasurer of Miller Industries, informed counsel for plaintiff that the Trustee, Manufacturers Hanover, was holding the pension checks until a determination could be made as to Mr. Sweet's whereabouts. A second request was made by plaintiff's attorney by letter sent December 19, 1975, but no pension checks were received.

After plaintiff petitioned the Probate Court, an Order was entered January 18, 1984, finding that Edward Joseph Sweet's date of death was determined to be May 11, 1982. On May 14, 1984, a complaint was filed in the United States District Court, Western District of Michigan, for pension benefits, interest, costs and attorney fees. On or about December 17, 1985, the parties agreed that $19,578.32, the payment representing 94 months of $208.28 per month, was due and owing. These monies were paid by the defendant to the plaintiff.

The District Court rendered an opinion and judgment on March 18, 1988, awarding pre-judgment interest, calculated pursuant to 28 U.S.C. Sec. 1961(a), from the date the complaint was filed until the settlement money was paid. (R. 28, Opinion at 6; R. 29, Judgment.) The District Court declined, however, to award plaintiff costs and attorney fees. (R. 28, Opinion at 7; R. 29 Judgment.) It is from this Opinion and Judgment that the plaintiff appeals.

Defendant Consolidated Aluminum Corporation additionally filed a cross-appeal based upon the District Court's denial on November 7, 1984 of Consolidated's motion to dismiss for plaintiff's failure to state a claim. This issue on cross-appeal will likewise be discussed, infra.

Plaintiff-appellant urges that the District Court erred in denying pre-judgment interest on the pension benefits from the date of the appointment of the Special Administrator, November 10, 1975. As stated, supra, the District Court allowed pre-judgment interest from the date the complaint was filed, May 14, 1984. The plaintiff-appellant, under the auspices of Bricklayers' Pension Trust Fund v. Taiariol, 671 F.2d 988 (6th Cir.1982) and Gavie v. Stroh Brewery Company, 668 F.Supp. 608 (E.D.Mich.1987), insists that the pre-judgment interest award should begin on the date of appointment of the Special Administrator, November 10, 1975. Bricklayers' Pension, supra, recognizes the ability of the court to grant pre-judgment interest. Gavie, supra, found an entitlement to pre-judgment interest was due the plaintiffs "only if they had an unqualified right to immediate receipt of the funds." Gavie, 668 F.Supp. at 614. Another case cited as authority by the plaintiff-appellant, Short v. Central States, Southeast and Southwest Areas Pension Fund, 729 F.2d 567 (8th Cir.1984), holds that interest is due from the date on which the beneficiary is "entitled" to the funds.

The plaintiff-appellant relies on the language of the Berrien County Probate Court Order dated November 10, 1975, which states the duty of the Special Administrator, Carl D. Sweet. The Probate Court therein stated that the Special Administrator "[s]hall collect and take charge of the Estate of Edward Joseph Sweet until the fact of death or survival of Edward Joseph Sweet can be satisfactorily established." (R. 28, Opinion at 2). This Court agrees with the plaintiff-appellant that he had an unqualified right to the receipt of Edward Joseph Sweet's monthly pension payments beginning from the day the Berrien County Probate Court specified its Order as recited, supra. That Order appointed Carl D. Sweet, named beneficiary and son of Edward Joseph Sweet, Special Administrator of the Estate. As such, the Special Administrator was "entitled" to the pension funds. The Special Administrator stood at that instant in a fiduciary position as to the Estate of Edward Joseph Sweet. By that same order, Manufacturers Hanover was obligated to proceed making payments to said Special Administrator.

The plaintiff-appellant is correct in its contention that ERISA requires that a retirement plan be operated for the exclusive benefit of the employees and beneficiaries. The defendant-appellee contends that the Trustee, Manufacturers Hanover, did not benefit from the withholding of the funds until December of 1985. This Court respectfully disagrees. Even assuming arguendo that the Trustee was acting prudently in withholding the pension funds until December of 1985, it cannot be said that this did not confer a benefit on the trustee. Any additional time one gains, rightfully or wrongfully, in not having to submit payment of a sum of money owed another is without doubt a benefit. Moreover, the payee, plaintiff-appellant herein, has been deprived of the benefit of those payments. As was stated in Short, supra, 729 F.2d at 576, "To allow the Fund to retain the interest it earned on funds wrongfully withheld from a beneficiary would be to approve of an unjust enrichment. Further, the relief granted would fall short of making the beneficiary whole because he has been denied the use of money which was his."

The District Court correctly concluded that the plaintiff, Carl Sweet, was entitled to an award of pre-judgment interest. However, its limitation to interest from the date of filing this lawsuit in the District Court was an abuse of discretion. The District Court reasoned that the date of the filing of the lawsuit was the proper date by virtue of the fact that after the Berrien County Probate Court determined that the legal date of the decedent's death was to be May 11, 1982, no request for Edward Sweet's pension benefits was made until this suit was filed. The District Court stated in its Opinion, at page 8, in acquiescence to the defendant's contention, as follows:

"Defendants note that although decedent's death was declared by the Probate Court to be May 11, 1982, no notice of the declaration or request for payment was made prior to filing of this action. In addition, while there is evidence to establish that Carl Sweet was appointed Special Administrator and that notice of the appointment was given to the Miller Industries, there is no evidence that the trustee, Manufacturer's Hanover, ever received said notice."

There are undisputed facts in the record however which indicate that Manufacturers Hanover did have prior notice. On November 26, 1975, the plaintiff's attorney wrote to the personnel director of Miller Industries inquiring what arrangements had to be made by Carl Sweet so that the pension monies could be paid to him for accumulation as part of the estate. A second letter was sent by plaintiff's attorney on December 19, 1975, again requesting receipt of the pension benefits. In response to the letter of November 26, 1975, C.O. Griffin, Treasurer of Miller Industries, on December 12, 1975, informed plaintiff's attorney that the Trustee, Manufacturer's Hanover, was holding the pension checks until a determination could be made as to Edward Sweet's whereabouts. (R. 28, Opinion at 3.) Thus, by the transmission of the letters of November 26, 1975 and December 19, 1975, it is certainly clear that requests were made for the pension benefits. Moreover, as C.O. Griffin informed plaintiff's attorney that the Trustee was holding the pension checks until a determination could be made, it can easily be inferred that Manufacturer's Hanover...