Rees et al v. Iron Workers' Local No. 25 Fringe Benefit Funds et al

Filing 110

OPINION AND ORDER denying Cross Motions for Reconsideration 108 109 Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DAVID M REES and WENDY REES,
Plaintiffs,
CASE NO. 14-CV-12401
HONORABLE GEORGE CARAM STEEH

v.
IRON WORKERS’ LOCAL NO. 25
PENSION FUND, et al.,
Defendants.
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OPINION AND ORDER DENYING CROSS
MOTIONS FOR RECONSIDERATION (DOCS. # 108, 109)
On September 30, 2015, the court granted summary judgment to plaintiffs David and
Wendy Rees on their federal law equitable estoppel claim against the defendant Iron Workers’
Local No. 25 Pension Fund (the “Fund”). The court explained that, based on the relevant case
law, the Fund was estopped from revoking plaintiffs’ retirement benefits. The court entered
judgment in favor of plaintiffs and against the Fund to this effect, and required the Fund to make
full payment to plaintiffs of all benefits that have not been paid since benefits were wrongfully
suspended in September 2013. (Doc. #107). The facts are explained in more detail in the
court’s order and are incorporated by reference. See (Doc. #106).
Now before the court is the defendants’ motion for reconsideration (Doc. #108) and
plaintiffs’ motion for clarification, amendment of the court’s opinion and order and judgment, and
for reconsideration (Doc. #109). For the reasons that follow, both motions will be denied.

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I. LEGAL STANDARD
The Local Rules of the Eastern District of Michigan provide that “[a] motion for rehearing
or reconsideration must be filed within 14 days after entry of the judgment or order.” E.D. Mich.
LR 7.1(h)(1). The motions are timely.
The court “will not grant motions for rehearing or reconsideration that merely present the
same issues ruled upon by the court, either expressly or by reasonable implication.” E.D. Mich.
LR 7.1(h)(3). To obtain reconsideration of a court order, “the movant must not only demonstrate
a palpable defect by which the court and the parties and other persons entitled to be heard on
the motion have been misled but also show that correcting the defect will result in a different
disposition of the case.” Id. A palpable defect “is a defect which is obvious, clear, unmistakable,
manifest, or plain.” Ososki v. St. Paul Surplus Lines Ins. Co., 162 F.Supp.2d 714, 718 (E.D.
Mich. 2001).
II. DISCUSSION
A. Defendants’ Motion
Defendants contend that the court erred in granting summary judgment to plaintiffs on
their equitable estoppel claim.
First, defendants argue that the court was misled to believe that the pension plan did not
require a participant to work 870 hours of service during each plan year. In other words,
defendants aver that it was unreasonable for Mr. Rees to believe that he could use his banked
hours to retire when the pension plan unambiguously required hours to be worked during a plan
year to receive credit for hours of service. Defendants misunderstand the court’s reasoning.

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In addressing the equitable estoppel element that requires the plaintiff to be unaware of
the true facts, the court reasoned:
Mr. Rees did not intend to retire until October 2012 when he would have worked
sufficient hours in the 2012 plan year to obtain the 30 and Out benefit. Trustee
O’Donnell explained to Mr. Rees that he could retire using his “banked hours.”
Until this time, Mr. Rees intended on working until October 2012, and he did not
know that he could not use “banked hours” towards calculating his credited
service. The Pension Plan defines “Hour of Service” as “each hour for which an
Employee is paid or entitled to payment by a Contributing Employer on account of
a period of time during which actual duties are performed.” Mr. Rees was unaware
that, despite Trustee O’Donnell’s statements to the contrary, and although he was
entitled to payment by Metro Industrial for the period of time which actual duties
were performed, the Pension Fund interprets the Pension Plan as requiring the
actual duties be performed within the plan year in which the hours are contributed.
(Doc. #106 at 26).
The court agrees with defendants that the plan says nothing about banked hours. That
is precisely why the following facts all show that Mr. Rees was unable to determine whether he
could use banked hours to retire by reference to the plan documents alone: (1) the Fund’s past
practice of crediting Mr. Rees for banked hours, (2) Trustee O’Donnell’s representation to Mr.
Rees that he could use his banked hours to retire a mere two months earlier than planned, (3)
the Fund Office’s pension qualification report stating that Mr. Rees would be eligible for
retirement effective August 1, 2012, and (4) Plan Administrator Kramer’s confirmation that he
reviewed Mr. Rees’s hours and that Mr. Rees was eligible for retirement. Defendants have not
established a palpable error with the court’s determination that Mr. Rees was unaware that he
could not use his banked hours towards retirement.
Second, defendants argue that plaintiffs did not establish the elements of their equitable
estoppel claim. Defendants argue that the court erred in determining that there was a writing
evidencing a misrepresentation made to plaintiffs.
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The misrepresentation, according to

defendants, was Trustee O’Donnell’s verbal representation that Mr. Rees could use his banked
hours to retire. However, defendants contend that there is no written misrepresentation relating
to the use of banked hours.
As the court explained in its opinion and order, plaintiffs met the writing requirement
because, in addition to Trustee O’Donnell’s verbal representation, the Fund Office and Plan
Administrator Kramer confirmed in writing that Mr. Rees was eligible to retire, and that he had
the requisite hours under the plan. This was all done after Plan Administrator Kramer allegedly
confirmed that Mr. Rees had worked the requisite hours. Thus, as the court explained, the
writing requirement is satisfied because written representations were made to Mr. Rees that he
had the necessary hours of service to retire.
Defendants also repeat arguments that plaintiffs have not established the remaining
equitable estoppel elements. The court has addressed each element in its opinion and order.
No palpable error has been established.
Finally, defendants argue that the court committed palpable error when it held the Fund
liable for misinformation provided by one trustee. Defendants are wrong. The court did not hold
the Fund liable for misinformation provided by one trustee. The court determined that Trustee
O’Donnell was acting on behalf of the Fund when he represented to Mr. Rees that he could use
his banked hours to retire. In addition, however, the Fund Office and Plan Administrator Kramer,
also acting on behalf of the Fund, confirmed in writing that Mr. Rees was eligible to retire and had
the requisite hours under the pension plan. Thus, it was not one statement made by one trustee
— multiple representations were made by the Fund through its agents.
For these reasons, the court will deny defendants’ motion for reconsideration.

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B. Plaintiffs’ Motion
Plaintiffs’ motion seeks clarification of two things. First, plaintiffs seek clarification that
“Defendants’ assessment against Plaintiffs of overpayment of pension benefits when Defendants
revoked Plaintiffs’ Special Retirement benefits in September 2013 be declared null and void, so
that the pension benefits to be paid by the Defendant Pension Fund from the date of Defendants’
revocation of Mr. Rees’s Special Retirement benefits in September 2013 cannot and will not be
offset by the amount of pension benefits previously paid to Mr. Rees from August 1, 2012 until
the date of such revocation.” (Doc. 109 at 3). The judgment entered by the court estopped the
Fund from revoking plaintiffs’ retirement benefits. The decision necessarily means that the
revocation of benefits in September 2013 was improper and that payments cannot be offset by
amounts Mr. Rees has been paid because he is entitled to those benefits. Thus, there is nothing
for the court to clarify.
Second, plaintiffs seek clarification that the injunctive relief ordered in the judgment take
immediate effect so that the full payment of past benefits not paid since September 2013 be paid
immediately. The court entered judgment on September 30, 2015. (Doc. #107). The judgment
was docketed on the same day. The judgment became effective immediately after being
docketed. It is not clear why plaintiffs believe differently.
Third, plaintiffs seek reconsideration of the court’s determination that the only proper
defendant to be estopped is the Fund. The court explained:
Plaintiffs bring a claim under federal common law seeking equitable
estoppel against defendants. This claim only applies against the Pension Fund.
Cataldo v. U.S. Steel Corp., 676 F.3d 542, 553 (6th Cir. 2012) (“Moreover, only the
Fund can potentially be estopped from doing anything, because it is the only
defendant that pays pension benefits in accordance with plan documents.”) (citing
Armistead v. Vernitron Corp., 944 F.2d 1287, 1299 (6th Cir. 1991)).
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(Doc. # 106 at 14). Plaintiffs argue that the court relied on dicta in Cataldo for this conclusion.
Although the Cataldo court’s statement may be dicta, the court determines that it is a
proper interpretation of equitable estoppel law. The only party with the ability to pay plaintiffs’
benefits is the Fund. Thus, it makes sense that the Fund be equitably estopped from revoking
plaintiffs’ benefits. On the other hand, however, the trustees of the Fund do not have an
independent obligation to pay benefits to a plan participant. Although the trustees may make
decisions on behalf of the plan, such as whether to pay a plan participant or the calculation of
benefits, it is the Fund that pays the benefits. And where, as here, it has been determined that
the plan participant is entitled to benefits, there are no decisions left to be made by the trustees
such that equitable estoppel would be an appropriate claim against them. The court has already
decided that plaintiffs are entitled to the special retirement benefit. Thus, it is the Fund that must
be directed to make the payments.
Finally, plaintiffs ask the court to issue a decision on their additional causes of action
rather than dismiss the claims as moot. As the court explained in the opinion and order, there
is no need to address the additional claims because judgment has entered in plaintiffs’ favor for
the entirety of the requested relief. Moreover, it is unnecessary to decide plaintiffs’ request for
preliminary injunctive relief given that final judgment has entered in their favor.
III. CONCLUSION
For the reasons stated above, the parties’ cross-motions for reconsideration are DENIED.
IT IS SO ORDERED.
Dated: October 21, 2015
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
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CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
October 21, 2015, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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