Tegtmeier v. Midwest Operating Engineers

• Decision Date: 07 December 2004
• Docket Number: No. 04-1025.,04-1025.
• Citation: 390 F.3d 1040
• Parties: Allen TEGTMEIER, Plaintiff-Appellant, v. MIDWEST OPERATING ENGINEERS PENSION TRUST FUND, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1040

390 F.3d 1040

Allen TEGTMEIER, Plaintiff-Appellant, v. MIDWEST OPERATING ENGINEERS PENSION TRUST FUND, Defendant-Appellee.

No. 04-1025.

United States Court of Appeals, Seventh Circuit.

Argued September 28, 2004.

Decided December 7, 2004.

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Mark D. DeBofsky, James R. Comerford (Argued), Daley, DeBofsky & Bryant, Chicago, IL, for Plaintiff-Appellant.

Catherine M. Chapman (Argued), Baum, Sigman, Auerbach, Neuman & Katsaros, Chicago, IL, for Defendant-Appellee.

Before BAUER, EASTERBROOK, and MANION, Circuit Judges.

MANION, Circuit Judge.

Allen Tegtmeier sued the Midwest Operating Engineers Pension Trust Fund (the "Pension Fund") for improper administration and breach of fiduciary duties under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001, et seq., alleging the defendant improperly calculated his disability award. Both parties moved for summary judgment, and the district court granted the Pension Fund's motion. Tegtmeier appeals. We affirm.

I.

A. The Plan at Issue

Allen Tegtmeier was an operating engineer who participated in the Midwest Operating Engineers Pension Plan (the "Pension Plan"), which the Pension Fund administers. The Pension Plan addresses when a disability pension begins, providing that "the payment of a total and permanent disability pension shall be effective as of the first day of the month next following the date the participant files an application for total and permanent disability pension...." (Emphasis added.) Thus, the date a person becomes disabled does not trigger payment of disability benefits; rather, benefits begin the month following the date the participant applies for the pension.

In 2001 and 2002, special significance attached to this effective date under the Pension Plan because of a major change to another plan covering Tegtmeier, the Midwest Operating Engineers Health and Welfare Plan (the "Health and Welfare Plan"). This plan also provided benefits to a disabled member, though the benefits only lasted for one year. Beginning in April 2000, the Health and Welfare Plan began a transition in welfare payment rates by members. Through 2001, all members paid the same monthly rate to the Health and Welfare Fund for welfare benefits received during a participant's retirement or when the participant was receiving disability benefits.¹ In an effort to reward seniority, however, the Health and Welfare Fund trustees decided to implement a new schedule beginning in January 2002.² This new schedule provided that participants with less seniority would pay greater monthly welfare rates in the case of retirement or disability than under the previous flat rate, while those with greater seniority (and who had paid greater amounts to the Health and Welfare Fund over the course of their careers) would pay less than under the pre-existing flat rate. This meant, in many cases, that if a participant filed for a disability pension before January 1, 2002, he would pay much less in monthly rates than if he filed after January 1, 2002, when the new scheduled kicked in. For a participant of ten to fourteen years seniority who became disabled such as Tegtmeier, it was the difference between paying a monthly rate of $237 to the Health and Welfare Fund (pre-2002 effective date of disability) and paying a monthly rate of $519 to the Health and Welfare Fund (post-2002 effective date of disability).

In addition to the effective date, the second provision of particular importance in this case concerns the claims administration procedure after an application is filed. For applications filed before January 1, 2002, Section 9.2 of the Pension Plan applies. This section states, in relevant part:

(a) Unless special circumstances exist, a Participant shall be informed of the Trustees' decision on his claim within 90 days of the date the claim is received, whether or not all the information and evidence necessary to process the claim is received. Within such 90-day period, the Participant shall receive the Administrative Manager's decision or a notice that:

(i) explains the special circumstances requiring a delay in the decision, and

(ii) sets a date, no later than 180 days after his claim has been received, by which he can expect to receive a decision.

The Participant may assume that his claim has been denied and may proceed to appeal the denial if the Participant does not receive any notice from the Administrative Manager within the 90-day period.

The remainder of Section 9.2 details what should be contained in a notice from the Administrative Manager and the review procedure when an application for benefits has been disapproved.

B. Tegtmeier's Disability

Tegtmeier injured his back at work on July 12, 2001. Following this injury, he began to receive weekly disability benefits from the Health and Welfare Fund that had a one-year period of eligibility, ending on July 11, 2002. Tegtmeier did not immediately seek disability benefits from the Pension Fund (which would have displaced payments from the Health and Welfare Fund). In fact, he did not inquire into obtaining these pension benefits until October 10, 2001. The next day, the Pension Fund sent him an application, which he did not return until November 30, 2001, the last date to qualify as a 2001 filing.

After filing his application, however, Tegtmeier showed reluctance to proceed with the actual determination of his disability status under the Pension Plan. On January 25, 2002, the Pension Fund sent Tegtmeier a letter stating that it did not have sufficient information to process his claim. The Pension Fund noted that he had failed to provide a Medical Examiner's Report and gave him until March 11, 2002, an additional forty-five days, to comply. The letter ended with the warning: "[i]f you do not provide this information, your claim will be denied."

Instead of providing this information promptly, Tegtmeier waited nearly a month before taking action. At that time, Tegtmeier talked to an unidentified person at the Pension Fund, who told him that he could put his application on hold. Tegtmeier then wrote a letter on February 26, 2002, received by Judith Kot of the Pension Fund, requesting that the Pension Fund put his application on hold.

Please put my application for my disability pension on hold. As of this date, I have not had my surgery. I've been advised even with a successful [sic] procedure, I should not return to operation of rough riding heavy equip. ie. [sic] Dozers, Earthmovers, Loaders, etc. [sic] My situation is still uncertin [sic] and at this time I feel this is in my best interest.

There is no record of any response by the Pension Fund to Tegtmeier's note.

On May 2, 2002, the Pension Fund sent Tegtmeier another letter requesting medical records. This May letter referenced the earlier letter and forty-five day extension, stating "[t]his is to notify you that we have not received all medical records to date." The Pension Fund asked for updates on all notes from January of 2002 onward and gave another forty-five day extension, which ended on June 16, 2002. On May 5, 2002, Tegtmeier responded to this letter, stating that he had surgery scheduled for May 29, 2002, and "request[ed] another extension of at least 45 days or more." There is no record of any response by the Pension Fund to Tegtmeier's letter. Tegtmeier underwent back surgery on May 29, 2002.

On July 12, 2002, Tegtmeier called the Pension Fund to discuss the status of his application. The Pension Fund stated that he would need to file a new application with medical documentation. Kot sent him a new application, which Tegtmeier completed and filed on July 30, 2002. The next day, he sent the Pension Fund a letter stating in pertinent part:

I hereby request that my initial application for disability dated Nov. 01 be still in affect [sic] .... I had no idea the importance of maintaining this Nov. 01 date due to Program changes, ie. [sic] effects, afterwards [sic]. I believe I was not completely informed and actually was vaguelly [sic] mislead [sic].

Despite Tegtmeier's pleas, the Pension Fund Review Board approved the July 2002 application for disability benefits (with an effective date of August 1, 2002) and denied his request to use the date of his first application for determining the monthly payments he owed to the Health and Welfare Fund. The Review Board explained that "[y]ou put your pension application on hold in February of 2002 and then notified the Fund in May 2002 that you were not ready to apply for pension. The Fund closed the application process and requested that you submit a new application when you were ready to pursue it."

Tegtmeier appealed the Review Board's decision to the Pension Fund Appeal Review Panel, which initially denied the appeal. Tegtmeier then asked for reconsideration, which led to a hearing as well as a November 19, 2002 decision from the Review Panel that was "final, conclusive and binding." Before the Review Panel, Tegtmeier acknowledged that he was "attempting to obtain the highest level of benefits during his rehabilitation to support his family," but indicated that he had misunderstood the consequences of waiting to proceed with his disability pension application. According to Tegtmeier, had he known that his delay would result in the higher rate, "he would not have made the financial decision to continue receiving welfare benefits instead of accepting pension benefits." The Review Panel concluded that the Pension Fund acted reasonably when treating the 2002 application as a new application, "since the first application had been stopped, more than 90 days had passed since the first application, and it is unknown whether Mr. Tegtmeier's first application for benefits would have been approved prior to surgery."

On February 29, 2003, Tegtmeier attempted to reopen his claim in the light of a favorable Social Security Administration decision from January 2003 that found...