Bloom v. The Teamster Affiliates Pension Plan

Filing 56

Order on Motion for Partial Summary Judgment, Order on Motion for Summary Judgment

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

JACQUELINE A. BLOOM,
Plaintiff,

Case No. 3:07-cv-0079-RRB

vs.
THE TEAMSTER AFFILIATES
PENSION PLAN,

ORDER RE SUMMARY
JUDGMENT MOTIONS

Defendant.

I.

INTRODUCTION
This action arises under the Employee Retirement Income

Security Act of 1974, 29 U.S.C. §1001 (ERISA).

At Docket 1,

Plaintiff Jacqueline Bloom seeks past-due benefits and damages from
Teamster Affiliates Pension Plan (TAPP) for failure to pay benefits
under the terms of the plan document and, alternatively, under the
theories of promissory estoppel and breach of fiduciary duty.
Bloom also seeks costs, attorney fees, and interest. TAPP seeks
summary judgment on all counts of Bloom’s Complaint at Docket 27.
Bloom seeks partial summary judgment requiring TAPP to reinstate
her to her “full earned pension” at Docket 30.

ORDER RE SUMMARY JUDGMENT MOTIONS - 1
3:07-CV-0079-RRB

This matter has

been fully briefed, and the court heard oral argument on June 24,
2008.
II.

FACTS
Bloom was employed in Fairbanks, Alaska, by General

Teamsters Local 959 from June 1970 through June 2004. As a result
of that employment and contributions made by her employer, she
became a participant, beneficiary, and retiree of two pension
plans: the Teamster Affiliates Pension Plan (“TAPP”) and also the
Alaska Teamster-Employer Pension Trust ("Alaska Plan").1

There is

no dispute that TAPP, the Defendant here, is an employee benefits
plan subject to the provisions of ERISA.
Bloom had a specific concern whether her TAPP pension
would be reduced because she had a second pension under the Alaska
Plan.

Accordingly, she asked TAPP whether its plan document would

require it to "aggregate" with the Alaska Plan.

TAPP responded

with a benefit estimate in a letter dated April 16, 2003, which
stated that Bloom was entitled to a benefit of $78,200 "immediate
lump sum" and a monthly annuity of $2,145.2

Responding to Bloom's

aggregation question, TAPP told her that her pension would "not be

1

Bloom was enrolled in a third pension plan, which is not
relevant to these proceedings.
2

Alternatively, Bloom could have chosen a $2,580 monthly
payment without the lump-sum payout. Docket 32-5.
ORDER RE SUMMARY JUDGMENT MOTIONS - 2
3:07-CV-0079-RRB

reduced" by aggregation with the Alaska Plan because that plan was
a multi-employer plan.3
Bloom chose to retire effective June 30, 2004.

She

prepared and submitted her pension application, which TAPP received
on April 16, 2004.

TAPP sent Bloom another letter regarding

estimated benefits on August 25, 2004.4

This letter reiterated

the same amounts as the letter dated April 16, 2003, but did not
contain the aggregation language.

By letter dated September 24,

2004, Bloom was advised her pension had been formally approved by
the trustees in the amount of $78,251 plus $2,187 per month,
retroactive to her July 1, 2004 retirement. She was to expect
checks by mail in the near future.5

But on October 1, 2004, TAPP

notified Bloom by telephone and letter that TAPP had stopped
payment on her lump-sum termination benefit check, as well as her
first pension check.6

On October 12, 2004, TAPP informed Bloom

via letter that her termination benefit of $78,251 would be
reinstated, and that her monthly pension benefit was calculated at

3

Docket 32, Ex. B at 2.

4

Docket 27, Ex. K.

5

Docket 32, Ex. D.

6

Docket 32, Ex. E.

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3:07-CV-0079-RRB

$62.00 per month.7

The lump-sum payment reissued nine months

later, without interest, on July 28, 2005.8
Bloom

appealed

the

Administrator’s

trustees by letter dated October 12, 2004.9

decision

to

the

On January 12, 2005,

Bloom renewed her appeal to the trustees, complaining that she
relied to her detriment on the misinformation provided by TAPP
regarding the amount of her pension.10 Bloom subsequently submitted
a further appeal document to the trustees, contesting the decision
to aggregate.

The trustees mentioned the issue at its meeting on

March 15, 2005, but took no action indicating “further research
would be needed.”11
At the next trustees' meeting, Bloom’s situation was
reviewed. Her pension was formally approved by the trustees in the
amount

of

$78,251

plus

$1,573.61

per

month.12

However,

TAPP

requested Bloom's signature on a document releasing TAPP and its
advisors of liability from any existing claim and also any future

7

Docket 32, Ex. X.

8

Docket 32, Ex. I at 1.

9

Docket 32, Ex. J.

10

Docket 32, Ex. M.

11

Docket 32, Ex. Q.

12

Docket 32, Ex. R at 145-146.

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3:07-CV-0079-RRB

claim "from the beginning of the world to the end of time."13
Bloom refused to sign the release.
On July 28, 2005, another letter from TAPP detailed the
calculations made pursuant to Section 415 of the Internal Revenue
Code, and concluded that Bloom’s monthly pension amount under TAPP
should

have

been

calculated

at

receiving payments at this rate.

$833

per

month.14

She

began

This lawsuit followed.

III. DISCUSSION
A.

Summary Judgment Standard
Rule 56 of the Federal Rules of Civil Procedure provides

that summary judgment should be granted if there is no genuine
dispute as to material facts and if the moving party is entitled to
judgment as a matter of law.

The moving party has the burden of

showing that there is no genuine dispute as to material fact.15
The moving party need not present evidence; it need only point out
the lack of any genuine dispute as to material fact.16

Once the

moving party has met this burden, the nonmoving party must set
forth evidence of specific facts showing the existence of a genuine

13

Docket 32, Ex. T.

14

Docket 32, Ex. I.

15

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

16

Id. at 323-325.

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3:07-CV-0079-RRB

issue for trial.17

All evidence presented by the non-movant must

be believed for purposes of summary judgment, and all justifiable
inferences must be drawn in favor of the non-movant.18

However,

the nonmoving party may not rest upon mere allegations or denials,
but must show that there is sufficient evidence supporting the
claimed factual dispute to require a fact-finder to resolve the
parties’ differing versions of the truth at trial.19
B.

Terms of the TAPP Plan & Internal Revenue Code § 415
A pension plan document is a legal document that sets

forth the terms and conditions for participants to earn and receive
a vested pension at retirement age. It is undisputed that Bloom was
eligible for a pension under TAPP.

Via the Internal Revenue Code,

(IRC), Congress has provided for a maximum limit on the amount of
pension benefits that can be provided to any individual participant
through a tax-qualified pension plan.20

TAPP argues the amount of

pension sought by Bloom is illegal because it exceeds the maximum
benefit limitation on the annual payout amount that is placed on
defined benefit pension plans by § 415(b).

17

Anderson v. Liberty Lobby, Inc.

(1986).
18

Id. at 255.

19

Id. at 248-49.

20

26 U.S.C. § 415.

ORDER RE SUMMARY JUDGMENT MOTIONS - 6
3:07-CV-0079-RRB

, 477 U.S. 242, 248-49

Section 10.1 of the TAPP plan document attempts to
incorporate the limitations described in § 415.21

It is undisputed

that §415 would not impose any limitation on Bloom's pension unless
the test was applied after aggregating her TAPP and Alaska Plan
benefits. Accordingly the dispute centers on whether the plan
document

contains

any

requirement

to

aggregate

Bloom’s

TAPP

benefits with her Alaska Plan benefits.
In 2001, in an attempt to comply with a change in the law
under the IRC, TAPP’s legal counsel drafted an amendment to the
plan.

The plan document was subsequently amended again and

restated

in

2004,

carrying

over

the

changes

made

in

2001.

Accordingly, at the time of Bloom’s retirement in 2004, the TAPP
plan provided:
Notwithstanding any other provision of this
Plan, if a Member is or has been covered under
this Plan and another defined benefit plan
that is required to be aggregated under
Section 415 of the Code and the regulations
there under, then the benefits payable with
respect to such Member under this Plan shall
be reduced to the extent necessary to ensure
that the total amount payable with respect to
the Member under this Plan and the other
defined benefit plan does not exceed the
limitations of Section 415(b)of the Code. For
purposes of the preceding sentence, the term

21

Section 10.1(a)(1) describes the "maximum compensation"
limit (based on highest compensation during a 36 month period.)
Section 10.1(a)(2) describes the "maximum dollar" limit ($160,000
subject to actuarial reduction for early retirees).
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3:07-CV-0079-RRB

“defined benefit plan” shall be redefined,
effective as of January 1, 2002, to mean only
a defined benefit plan that is not a
multi-employer plan. This redefinition shall
be applied, however, only to the maximum
dollar limitation which is set forth in
Section 415 of the Code and in Section
10.1(a)(2) above.22
In drafting the amendment, TAPP’s counsel used the words “maximum
dollar limitation” instead of “maximum compensation limitation,”
which gave the provision an entirely different meaning that what
TAPP now says was intended.
“scrivener’s”

error,

which

TAPP now describes this error as a
was

not

corrected

until

the

TAPP

Trustees took action in February 2008 to amend and restate Plan
Amendment retroactively to 2001.
C.

Plain Meaning
Bloom seeks enforcement of the Plan as written in 2004.

She argues that a plain reading of section 10.1(h) yields the
result that her two pensions should not be aggregated, resulting in
a significantly higher monthly pension payment from TAPP.

Bloom

argues that under the 2004 language of the Plan, the pre-retirement
advice Bloom received from TAPP, that it would not aggregate her
TAPP and Alaska Plan benefits, and also the original 2004 approval
of her pension, were in accord with the Plan Document.

22

Section 10.1(h), Docket 27, Ex. C at 44 (emphasis added).

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3:07-CV-0079-RRB

TAPP requests this court to reject enforcement of the
written Plan language under various theories. TAPP asks this court
to disregard the non-aggregation mandate of Section 10.1(h) as a
scrivener’s error, and instead apply the aggregation language set
forth in IRC §415(f)(3)(A) in order to effectuate the intent of the
trustees. It requests a finding that the language is unenforceable
because it violates ERISA. Elsewhere, TAPP suggests that the
language of 10.1(h) is ambiguous, and therefore the Court must look
to extrinsic evidence to resolve this ambiguity.
argues

that

the

first

sentence

(

Finally, TAPP

“Notwithstanding

any

other

provision of this Plan”) should be elevated to the status of a
"savings

clause,"

prohibiting

any

Plan

amendment

which

would

contravene its former meaning.
The Ninth Circuit has held that the terms in an ERISA
plan should be interpreted “in an ordinary and popular sense as
would a [person] of average intelligence and experience.”23

More

specifically:
[C]ourts should first look to explicit
language of the agreement to determine, if
possible, the clear intent of the parties. The
intended meaning of even the most explicit
language can, of course, only be understood in
the light of the context that gave rise to its
inclusion. . . . Each provision in an

23

Richardson v. Pension Plan of Bethlehem Steel, 112 F.3d
982, 985 (9th Cir. 1997) (internal citations omitted).
ORDER RE SUMMARY JUDGMENT MOTIONS - 9
3:07-CV-0079-RRB

agreement should be construed consistently
with the entire document such that no
provision is rendered nugatory. . . .
Typically, however, when a plan is ambiguous,
a court will examine extrinsic evidence to
determine the intent of the parties.24
The Court finds that § 10.1(h) is, at best, ambiguous.
It is impossible to reconcile the second and third sentences of the
provision with the first sentence of the provision, “in the light
of the context that gave rise to” the amended language.

It is

undisputed that the amended language of the last two sentences was
included in response to a change in the IRC, but the new language
then

failed

to

implement

the

Code

changes

due

to

either

a

scrivener’s error or TAPP counsel’s misinterpretation of the law.
The Court need not determine which explanation is true in order to
find that the amendment as written is inconsistent with the plan
purpose and language, and is inconsistent with the IRC, and that it
therefore is ambiguous.

Furthermore, in light of Bloom’s estoppel

argument, it is unnecessary for the Court to consider extrinsic
evidence to determine the “intent of the parties.” For purposes of
this matter, the intent of TAPP or its counsel at the time of the
amendment is irrelevant.

24

Id. (citations omitted).

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3:07-CV-0079-RRB

D.

Estoppel
Plaintiff argues that if the Court finds ambiguity, the

doctrine of estoppel should be applied, and TAPP should not be
permitted to retroactively change her pension amount because she
relied on the quoted amount in making her retirement decisions.
TAPP disputes that there is adequate evidence to support an
estoppel argument.
The Ninth Circuit has held that recovery may be permitted
under the federal common law claim of equitable estoppel in an
ERISA action.25

Specifically, the Ninth Circuit allows federal

common law estoppel to enforce a representation regarding a benefit
plan when the representation interprets an arguably ambiguous plan
term, and does not modify the plan itself, but only when incorrect
representations involving an oral interpretation of the Plan are
made to the employee.26
The Court has already determined ambiguity.

Although it

is undisputed that oral estimates were provided to Bloom, TAPP
suggests that Bloom’s claim is preempted to the extent she relies
on written, rather than oral, statements to assert reliance.
However, the Court finds that the written letters of Tom Metzinger,

25

See Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d
812, 821-22 (9th Cir. 1992).
26

Id.

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3:07-CV-0079-RRB

the Trust Administrator, merely exceed the requirement that there
be “incorrect representations involving an oral interpretation of
the Plan.”

Metzinger’s letters memorialize his interpretations.

Furthermore, they are consistent with the oral statements made by
other TAPP representatives. The Court finds it would put form over
substance to exclude his letters because they were not presented
orally to Bloom.
Having concluded that Bloom has standing to pursue an
estoppel claim, the Court turns to the elements she must prove.
When a plaintiff seeks to recover benefits under an ERISA plan
based on a claim of equitable estoppel, the Ninth Circuit requires
the plaintiff to show:

(1) that the party to be estopped knew the

relevant facts; (2) that the party to be estopped intended that its
conduct would be acted on or acted in a way that the plaintiff had
a right to believe it was so intended; (3) that the plaintiff was
ignorant of the true facts; and (4) that the plaintiff relied on
the former's conduct to his injury.27
TAPP knew the relevant facts.

Bloom was hoping to

retire, and she sought a summary of her benefits under the Plan.
Any error on TAPP’s part was an error in interpretation of its own
Plan.

TAPP routinely provided estimates to its participants in

27

Greany, 973 F.2d at 821.

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3:07-CV-0079-RRB

anticipation of retirement.

It should have come as no surprise

that a participant would rely on TAPP for at least a close
approximation of available pension benefits.

TAPP also knew or

should have known about the § 415 limitations.

Although the

letters

were

contained

disclaimers

that

the

numbers

merely

estimates and subject to change, this case is unique in that Bloom
specifically asked about aggregation, a question that required a
straightforward “yes” or “no” answer.

The Court is not persuaded

by TAPP’s repeated argument that the TAPP statements came from
“non-fiduciary plan administrators.”

Although this may be true

with respect to the telephone conversations Bloom had with various
trust employees, the letters were drafted on TAPP Board of Trustees
letterhead,

and

administrator.
TAPP

were

signed

by

Tom

Metzinger,

the

trust

The final letter was from the Board itself.
argues

that

Bloom

does

not

meet

the

third

requirement, that she was “ignorant of the true facts,” because
Bloom knew as well, or better, than the trust employees the impact
of

§

415

on

her

pension.

However,

TAPP

is

assuming

understood and engaged in a legal analysis, not a fact.

Bloom

The fact

is that Bloom had knowledge that aggregation could occur, and she
sought a definitive answer from TAPP - the entity responsible for
making the calculations - as to whether aggregation would occur.
Although TAPP argues that Bloom’s repeated requests regarding

ORDER RE SUMMARY JUDGMENT MOTIONS - 13
3:07-CV-0079-RRB

aggregation are a sign that she knew TAPP was calculating her
pension incorrectly and took advantage of TAPP’s error, the Court
finds that Bloom’s repeated requests regarding aggregation should
have triggered someone at TAPP to realize that they had made an
error.

Instead, Bloom’s application went through numerous levels

of review before the trustees officially informed her of her
pension amount by letter on September 24, 2004.28
Finally, Bloom relied on TAPP’s conduct to her injury.
TAPP argues that Bloom never relied on any of the incorrect
information on her TAPP benefit in making her decision to retire
early, and therefore her claims in this regard are without merit.
Specifically, TAPP has made much ado about Bloom’s statement at
her deposition that even if she had known the aggregated amount of
her TAPP retirement, she could not say definitively whether or not
she would have retired when she did, but rather that it would have
“weighed heavily” in her decision.29

TAPP argues that Bloom’s

statement is not enough to show reliance on TAPP’s conduct.
Court

disagrees.

Bloom’s

retirement,

when

considered

The
in

conjunction with additional debts she took on at the time of her
retirement, clearly indicates her reliance on TAPP’s repeated

28

Docket 32, Ex. D.

29

Docket 27, Ex. I at 117-118.

ORDER RE SUMMARY JUDGMENT MOTIONS - 14
3:07-CV-0079-RRB

statements

regarding

her

pension.30

Such

reliance

was

not

unreasonable in light of the specific facts of this case.
There is no evidence to support the theory that Bloom
somehow took advantage of TAPP, using her knowledge of § 415.

Nor

is the Court persuaded by Metzinger’s statement in his deposition
that pension estimates never contained aggregation calculations.

31

Bloom specifically asked whether her pension amounts - whatever
they were - would be aggregated.

Metzinger specifically replied

that her pensions would not be aggregated.

This, more so than the

mathematical blunders, was TAPP’s critical error.

TAPP offers no

rational argument why Bloom should have presumed that her pension
amounts would be aggregated, in light of the definitive answer from
the TAPP trust administrator that they would not be aggregated.
E.

Interest
TAPP

interest

on

conceded

late

at

payments

oral

argument

for

“normal

that

ERISA

retirement,”

calculations of such interest are governed by ERISA.

requires
and

the

However,

TAPP suggested that because Bloom took early retirement, that the
interest provisions may be inapplicable. Elsewhere, TAPP indicated

30

Bloom’s affidavit at Docket 31 indicates that she made
financial commitments in light of the amount of her pension,
including home renovation and construction, college tuition, and
expenses associated for caring for her elderly mother.
31

Docket 27, Ex. F at 91.

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3:07-CV-0079-RRB

that it would not pay interest on any late payments absent a court
order.
The

Court

finds

appropriate in this case.

that

interest

on

late

payments

is

The parties shall advise the Court if

further briefing is required to determine the rate or amount of
such interest.
F.

Remaining Issues
Plaintiff’s Complaint also alleges a breach of fiduciary

duty, as well as a failure to follow claim procedures and a failure
to

provide

required

information.

The

Court

finds

there

is

inadequate information in the record to grant summary judgment to
either party regarding these issues.

Moreover, they may be

rendered moot by virtue of this decision. The parties shall advise
the Court if they require the assistance of a settlement judge.
IV.

CONCLUSION
In light of the foregoing, it is hereby ORDERED that

Plaintiff’s Motion for Partial Summary Judgment at Docket 30 is
GRANTED.

Bloom’s pension amount shall be calculated without

aggregation, retroactive to the date of retirement. TAPP shall pay
interest under ERISA for any past-due amounts.

Defendant’s Motion

for Summary Judgment at Docket 27 is DENIED.
ENTERED this 5th day of August, 2008.
S/RALPH R. BEISTLINE
UNITED STATES DISTRICT JUDGE
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