Veltri v. Building Service 32B-J Pension Fund

• Decision Date: 27 December 2004
• Docket Number: Docket No. 03-9287.
• Citation: 393 F.3d 318
• Parties: Alfred VELTRI, Plaintiff-Appellee, v. BUILDING SERVICE 32B-J PENSION FUND and The Trustees of the Building Service 32B-J Pension Fund, Defendants-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

393 F.3d 318

Alfred VELTRI, Plaintiff-Appellee, v. BUILDING SERVICE 32B-J PENSION FUND and The Trustees of the Building Service 32B-J Pension Fund, Defendants-Appellants.

Docket No. 03-9287.

United States Court of Appeals, Second Circuit.

Argued: August 30, 2004.

Decided: December 27, 2004.

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Robert J. Bach, New York, NY, for Plaintiff-Appellee.

Ira A. Sturm, Raab, Sturm & Goldman, LLP, New York, NY, for Defendants-Appellants.

JACOBS and POOLER, Circuit Judges^*.

BACKGROUND

POOLER, Circuit Judge.

Appellant Building Service 32B-J Pension Fund ("the Fund") is a multi-employer pension trust fund within the coverage of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461, whose participating members work in the building services industry ("the industry") in and around New York City. Appellee Alfred Veltri entered covered employment in April 1957. Until December 1969 Veltri worked as an elevator operator and doorman. Veltri returned to the industry in June 1980 after an 11-year hiatus and again worked as an elevator operator and doorman until his retirement in 1992.

On March 27, 1992, a few months prior to his expected retirement, Veltri submitted to the Fund an application for a retirement pension, seeking benefits for his service from 1957 to 1969 and from 1980 to 1992. On August 11, 1992, the Fund informed Veltri in writing that he would receive a pension of $209.00 monthly from April 1, 1992, to June 1, 1992, and $212.00 thereafter. Veltri and his wife countersigned this notice as required. On May 5, 1993, Veltri wrote to the Fund inquiring why his pension was only $212.00 and why he was not credited with his years of work between 1957 and 1969. On May 25, 1993, the Fund responded that his employment prior to 1970 was not credited due to the Fund's break-in-service rule, which caused him to lose all credit prior to the break. This letter referred to an enclosed copy of the Fund's "Pension Fund booklet" and invited Veltri to call with any questions, but while the booklet did contain a section discussing administrative appeals, the letter did not reference that section of the booklet, nor did it specifically mention Veltri's right to appeal the Fund's decision not to credit his pre-1970 service. Veltri did not immediately appeal this determination, and thereafter has accepted monthly payments of $212.00 until the present day. Veltri contends that during the eleven years since receiving this letter he has called the Fund on several occasions but has never received a response.

In early 2001, Veltri again inquired by letter about the amount of his pension. The Fund responded that it excluded his work prior to 1970 because he did not work in the industry for three consecutive years after leaving in 1969 and thus incurred a break in service under the Fund's rules. On May 1, 2001, Veltri, through his newly retained attorney, requested the Fund's record of his service. The Fund did not respond to this letter. Veltri's attorney again wrote on June 25, 2001, with a copy to the Department of Labor. After the Fund provided Veltri with the information he sought, Veltri's attorney wrote again in August 2001, to inform the Fund that its records of Veltri's service were incorrect. Veltri received no response to this letter.

By letter from his attorney to Kevin Duffy, then Director of the Fund, dated November 26, 2001, Veltri filed a claim for additional pension benefits. He received no response. By letter from his attorney dated March 7, 2002, Veltri filed an appeal with the Trustees of the Fund, again claiming additional benefits. He again received no response. On June 4, 2002, Veltri filed the instant lawsuit. On summary judgment, the district court denied the Fund's motion and granted Veltri's cross-motion, directing appellants to recalculate Veltri's benefits.

In its summary judgment motion the Fund argued that Veltri's suit, filed eleven years after the Fund's initial denial of benefits for his pre-1970 service, was time-barred by the applicable six-year statute of limitations, and that in any event Veltri failed to state a claim under ERISA because his absence from covered employment for over ten years after December 1969 constituted a "break in service" causing him to forfeit, under the terms of the plan, credit for his pre-1970 service. The district court rejected these contentions, holding that the Fund's failure to comply with federal regulations requiring it to notify Veltri of his right to administrative appeal and to maintain an action in court challenging its denial of his claim to benefits entitled Veltri to equitable tolling of the statute of limitations, and that under this Court's holding in McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, 320 F.3d 151 (2d Cir.2003), the Fund was prohibited from disregarding Veltri's pre-1970 service. Although for slightly different reasons, as we find that the district court was correct on both points, we affirm.

DISCUSSION

I. Equitable Tolling

Statutes of limitations are generally subject to equitable tolling where necessary to prevent unfairness to a plaintiff who is not at fault for her lateness in filing. See Haekal v. Refco, Inc., 198 F.3d 37, 43 (2d Cir.1999). Equitable tolling is an extraordinary measure that applies only when plaintiff is prevented from filing despite exercising that level of diligence which could reasonably be expected in the circumstances. See Irwin v. Department of Veterans Affairs, 498 U.S. 89, 96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). For example, equitable tolling has been held appropriate where plaintiff filed and served defective papers before the expiration of the statutory period, see American Pipe & Const. Co. v. Utah, 414 U.S. 538, 558, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), or where defendant induced plaintiff to file late through trickery or deception, see id. at 559, 94 S.Ct. 756; Glus v. Brooklyn E. Dist. Terminal, 359 U.S. 231, 235, 79 S.Ct. 760, 3 L.Ed.2d 770 (1959). Equitable tolling has also been held appropriate where plaintiff was somehow prevented from learning of her cause of action within the statutory period.

Where defendant is responsible for concealing the existence of plaintiff's cause of action, this Court has held equitable tolling appropriate. See Pearl v. City of Long Beach, 296 F.3d 76, 80 n. 3 (2d Cir.2002) (collecting cases). While we have frequently referred to this doctrine as "fraudulent concealment," defendants' conduct need not be actually fraudulent. "The doctrine has been applied ... where the facts show that the defendant engaged in conduct, often itself fraudulent, that concealed from the plaintiff the existence of the cause of action." Cerbone v. International Ladies' Garment Workers' Union, 768 F.2d 45, 48 (2d Cir.1985) (emphasis added). The relevant question is not the intention underlying defendants' conduct, but rather whether a reasonable plaintiff in the circumstances would have been aware of the existence of a cause of action. See Pearl, 296 F.3d at 82; Cada v. Baxter Healthcare Corp., 920 F.2d 446, 451 (7th Cir.1990) (Posner, J.).

Here, federal regulations required defendants to provide Veltri with notice of his right to file an administrative appeal of his adverse benefits determination and of the right to file an action challenging that determination in court. Specifically, 29 C.F.R. § 2560.503-1(g)(1) states that the required notice to the claimant of an adverse benefit determination

shall set forth, in a manner calculated to be understood by the claimant —

....

(iv) A description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action....

This regulation was promulgated pursuant to Congress's mandate that employee benefit plans covered by ERISA "provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied," 29 U.S.C. § 1133(1), and "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review," id. § 1133(2). This specific mandate was part of Congress's general response to the "lack of employee information and adequate safeguards concerning" the operation of such plans, which threatened the "continued well-being and security of millions of employees and their dependents." Id. § 1001(a). Congress therefore intended, through ERISA, to "protect ... the interests of participants in employee benefit plans and their beneficiaries, by ... establishing standards of conduct, responsibility, and obligation for fiduciaries ... and by providing for appropriate remedies, sanctions, and ready access to the Federal courts." Id. § 1001(b).

It is uncontested that defendants failed to fully comply with the regulatory notice requirements. In particular, while defendants contend that enclosure of a copy of their Pension Fund booklet with their letter denying Veltri's claim to additional benefits sufficed to discharge their burden to notify him of his right to an administrative appeal, defendants did nothing that even approached compliance with the requirement that they inform Veltri of his right to file an action in court.

While the Fund's failure to inform Veltri of his right to file an action in court challenging its denial of benefits for his pre-1970 service is not the kind of concealing activity that would normally be held to mandate equitable tolling, the Fund's nondisclosure must be viewed in light of the regulatory notice requirement and of Congress's policy of protecting the interests of pension plan participants by ensuring "disclosure and reporting to participants" and "ready access to the Federal courts." Id. The notice regulation assumes that a reasonable beneficiary would not otherwise be aware of the existence of a cause of action, and the congressional policy...